Short-Term Disability Insurance vs. Long-Term Disability Insurance

Short-term disability insurance and long-term disability insurance are both designed to provide replacement income to you and your family in the event you are unable to work due to accident or sickness. The definition of disability and the conditions under which you can collect benefits, will differ depending on the policy and state. Find an agent to speak with who can detail the regulations in your state.

The most obvious difference between the policies is the amount of time they are designed to sustain your income. A short-term policy covers you for a select period up to a maximum of two years; a long-term policy will cover you for a select period of a minimum two years and up to age 67.

There are advantages to both policies:

Short-Term Disability Advantages

Short-term disability insurance pays benefits after a pre-determined elimination period (The number of calendar days after a disabling injury or illness before your disability insurance policy would begin to pay benefits) has been met.

As implied by the name, short-term disability insurance lasts for a shorter, specified period. This type of insurance policy is useful for major, but relatively brief, disabilities such as those suffered from an accident or a non-terminal sickness.

Often, short-term disability insurance is only a portion of how people protect their income in a situation where they cannot work. They will also use means such as emergency savings, workers' compensation, paid leave and other forms of insurance in conjunction with short-term disability. But when these benefits are exhausted (or, if you never had them in the first place), short-term disability can provide critically important funds.

See what is not covered by a short-term disability insurance policy.

Long-Term Disability Advantages

In the case of a long-term absence from work, a combination of short-term disability insurance benefits and other savings may not be enough to sustain your family financially. This could leave you vulnerable to financial burdens, such as mortgage foreclosure or default on debt, for example.

A long-term disability insurance policy can help protect you and your family from scenarios like this. These insurance policies provide comprehensive, long-term benefits that will cover you in the event of accident and sickness. There are also additional rider options available for a long-term policy, allowing you to tailor coverage to your unique needs.

The benefit period on these policies ranges from two years or until age 67. Because your state may have different regulations governing the length and availability of long-term (and short-term) disability insurance, it is important to talk with a licensed insurance agent in your area to confirm this time frame.

See what is not covered by a long-term disability insurance policy.

Which Option is Right for Me?

If you rely on your income to pay bills or other necessary expenses, then both policies can help you. Long-term disability insurance is highly recommended for anyone that relies on their income, whether or not they have savings. People with robust savings and investments that they can draw from may be able to maintain their financial bearings without short-term disability, but it could be an unnecessary risk.

Both long-term and short-term disability insurance policies protect you and your family from unpredictable accidents and illnesses. Talk to your insurance agent to learn more about which policy fits your situation, or get a quote online.

Other Disability Insurance Resources

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Exclusions and Limitations-Long-Term Disability Income Insurance
We will not pay benefits for: loss that begins while this policy is not in force; loss resulting from an act of declared or undeclared war; loss sustained while serving in the armed forces (upon notice to us of entry into the armed forces, the unearned portion of the premium will be refunded); loss caused by intentionally self-inflicted injury; loss resulting from commission or attempted commission of a felony; loss caused by suicide or attempted suicide, while sane or insane; loss resulting from your being legally intoxicated or under the influence of an illegal substance or a narcotic (except for narcotics given on the advice of and taken as prescribed by a Physician); loss for which benefits are provided under any state or federal worker's compensation, employer's liability or occupational disease law; loss resulting from Substance Abuse; or loss resulting from Mental or Nervous Disorders.

Exclusions and Limitations-Short-Term Disability Income Insurance
We will not pay benefits for: loss that begins while this policy is not in force; loss resulting from an act of declared or undeclared war; loss sustained while serving in the armed forces (upon notice to us of entry into the armed forces, the unearned portion of the premium will be refunded; loss caused by intentionally self-inflicted injury (while sane in Colorado); loss resulting from commission or attempted commission of a felony; loss caused by suicide or attempted suicide, while sane or insane; loss resulting from your being legally intoxicated or under the influence of an illegal substance or a narcotic (except for narcotics given on the advice of and taken as prescribed by a Physician); loss for which benefits are provided under any state or federal worker's compensation, employer's liability or occupational disease law; loss resulting from Substance Abuse; or loss resulting from Mental or Nervous Disorders.

Exclusions and Limitations-Accident Only Disability Income Insurance
We will not pay benefits for: loss that begins while this policy is not in force; loss resulting from an act of declared or undeclared war; loss sustained while serving in the armed forces (upon notice to us of entry into the armed forces, the unearned portion of the premium will be refunded); loss caused by intentionally self-inflicted injury; loss resulting from commission or attempted commission of a felony; loss caused by suicide or attempted suicide, while sane or insane; loss resulting from your being legally intoxicated or under the influence of an illegal substance or a narcotic (except for narcotics given on the advice of and taken as prescribed by a Physician); loss resulting directly or indirectly from disease or bodily infirmity; or loss for which benefits are provided under any state or federal worker's compensation, employer's liability or occupational disease law.

Exclusions and Limitations-Business Overhead Expense Disability Income Insurance
Benefits are not payable for loss beginning while the policy is not in force; loss resulting from suicide while sane or insane; loss resulting from air travel sustained while a passenger (not as a pilot or member of the crew), for transportation only; loss caused by an act or declared or undeclared war; loss sustained while in a armed service (upon notice to the Company or entry into such service, the pro rata premium will be refunded); normal childbirth, normal pregnancy or voluntary induced abortion. In ID, benefits are payable for complications of pregnancy on the same basis as any other sickness.

We will not be liable for any loss that results from being under the influence of any narcotic unless administered on the advice of a physician.

AFN40102-552