Short-Term And Long-Term Disability Insurance Guide

In the job and employment field, we hear a lot of terms and words. Short-term disability insurance and long-term disability insurance are also common terms that we come across. Both these terms are different, and they should be studied separately. 

Short-term disability insurance protects the employee’s income if he has some injury, sickness, or accident. 

Suppose the employee cannot work for a short period due to the mentioned reasons. In that case, short-term disability insurance gets kicked off. 

Long-term disability insurance is also insurance to protect the employee’s loss of income if he gets injured or met with an accident or illness. However, the period considered here is long-term. 

Who Pays The Premium For Disability Insurance?

It is often a question of who must pay the premium for disability insurance as offered to the employee. There are two types of insurance. 

One is short-term disability insurance, and the other is long-term disability insurance. Both are meant to protect against the loss of income because of staying absent from work. 

  • However, the terms differ based on short-term disability or long-term disability. But one thing you must note here is that both short-term and long-term disability insurance does not cover work-related injuries.

  • Ideally, employers must sponsor short-term and long-term disability insurance. These types of options were available in traditional insurance policies. However, many employers these days prefer some contribution from employees, and then some contribution will come from the employer’s side. 

  • But, if the employers are not ready to provide such benefits, then the employees can buy a short-term disability insurance policy and pay the premiums for the same. 

  • Suppose the employer has provided short-term disability insurance coverage of a small amount, and the employee wants additional coverage. In that case, he has to pay a premium for that additional coverage he buys.

  • The same holds for long-term disability insurance too. Ideally, the employer should pay the premiums or sponsor the insurance. If that’s not the case, then contributions from the employee and the employer’s contribution will also help in premium payments. If the employer does not provide such facilities, the employee has to sponsor his premiums for long-term disability insurance.

  • A person’s income is extremely crucial to maintain his lifestyle. It is, therefore, ideal to have long-term and short-term disability insurance. You can still get some portion of your income if something goes wrong. If it is not employer-sponsored, you can buy this insurance for yourself and your safety.

Important Things To Know About Short-Term Disability Insurance

1. Short-term disability insurance is essential to cover the loss of your income.

When injury or illness is unrelated to work, one can claim short-term disability benefits if the employee is insured with such an insurance plan.

 Often when people meet with an accident, they have to sit at home or should be at the hospital to become fine. It would take some time, and there are chances that during this period, the employee may lose the pay or wages.

 Suppose the employee is covered with short-term disability insurance, then the time he doesn’t work. In that case, he can still earn up to 40 to 80 percent of the monthly income based on company policies.

2. What are things covered in short-term disability insurance?

Short-term disability insurance covers disability due to injuries or any accident that is not at work. It also covers childbirth and physical and mental illness.

3. What is the duration of short-term disability?

Short-term disability insurance is mainly for three to six months, and the maximum time limit is one year. 

4. Is there an elimination period in short-term disability insurance?

Depending upon the insurer, there is an elimination period for short-term disability insurance. In some cases, it is 7-8 days; in some rare cases, it is 180 days.

5. How to make an application for short-term disability?

You can either contact your company’s human resource department or directly talk to the insurance company. Talk to them about what has gone wrong with you and how you can avail the maximum benefits. 

They will ask you to submit some vital documents. You must keep those documents ready and fulfill the procedure duly.

6. What are the benefits of short-term disability insurance if it is employer-sponsored?

Short-term disability insurance is good because the employee will get at least some portion of income. At the same time, he is ill and not working.

If the insurance is specifically employer-sponsored, then there are many benefits. The employees feel valued, and they would want to stay with the company. 

Employees perceive short-term disability insurance where the employer sponsors it as quite beneficial, and they stay motivated. When the new talent also comes to know about these beneficial policies of the company, they would want to join such a company.

Important Things To Know About Long-Term Disability Insurance

1. How does long-term disability insurance work?

Long-term disability insurance helps to replace the loss of income if there is a long-term disability. Any individual can take this insurance plan. 

It is quite common among companies where the plan may be employer-sponsored. People in business or self-employed may take such insurance on their own and pay premiums for the same. 

The duration for long-term disability insurance is 2.5 years to 10 years. It covers the disability, illness, and injuries that are caused not due to work.

2. How to know that employer-sponsored long-term disability coverage is enough?

It is vital to talk to the company’s HR department or the insurance company to figure out whether the coverage is enough to replace 100 percent of the person’s income when a long-term disability strikes. 

In most cases, the insurance will cover 40-60 percent of the person’s income. If you feel the need, you can take additional coverage and pay premiums for that extra coverage.

3. Is there a waiting period?

In most cases, the waiting period is 90 days. You can still get in touch with the insurance company and determine how you will be paid.

You can also take the guidance of the HR department in your company.

4. How beneficial is long-term disability insurance for the company sponsoring it for the employees?

The employer-sponsored long-term disability insurance provides positive feedback to the employees, and they feel valued.

They would not want to leave the company as they understand that staying with it will benefit them if a mishap happens.

5. What are things covered in long-term disability insurance?

A lot of health ailments and injuries are covered under long-term disability insurance. However, what’s not covered is the accident that happens due to work-related commitments. If there are pregnancy-related complications, then they are also covered. 

Heart conditions, cancer, pneumonia, and many other ailments are covered. It is, however, prudent to check with the insurance company where you have taken your insurance plan.


People may lose income when they can’t work due to an injury or illness. Depending on the problem, there will be a case of short-term disability or long-term disability. The short-term disability might be eligible for a few months. 

Long-term disability would mean that a person is not able to work for many years to come. Having insurance plans for such a disability can save the person’s lost income while he is not working. Meeting an accident or facing severe illnesses might be the reasons for absence from work. 

Most companies sponsor these types of insurance for their employees. But, if they do not, the individuals must take a standalone policy for long-term or short-term disability. 

You can check with the company’s HR department whether they provide such employee benefits. 

Gaining awareness about these things can protect your income and help you with your daily living expenses even when absent from work. You must understand the company’s policies, which will work in your favor.

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