Short Term Disability

Imagine an unknown disaster that leaves you partially or fully disabled for a short time period. An example can be breaking your leg and being unable to work (if your job requires manual labor). Consequently you would not be able to work especially for the near future. You might have to face severe financial difficulties if you have not saved enough for rainy days even if you are aware that you will recover fully. Short-term disability insurance is an invaluable alternative to meet your daily expenses during your (short-term) disability. Most employers purchase short-term disability insurance for their employees. Your short-term disability insurance thus pays your salary (either in full or in part) in case of a short-term disability caused by illness or injury etc. Majority of the short-term disability insurance policies provide assists a weekly fraction of your salary (generally between 50 to 60 percent) for a period ranging from 13 to 26 weeks. Payment usually starts within one to fourteen days of your disability. Time taken to process your claims usually depends on whether you are ill or injured. Claims are paid instantly in case of injury. On the contrary there is a time lag in claims payment in case of illness because of the requirement of proof that illness in question is serious enough to lead to (short-term) disability.

However you can get instant benefits in case of specific injuries. For example if you have been brutally injured because of falling of the ladder/stairs your benefits’ payment will resume right away. Contrarily if you are suffering from a grave illness and are unable to work your benefits’ payment will most likely be deferred for around eight days. If you have short-term disability insurance under your employment contract your employer may place limitations as to when you receive the benefits. Your employer would most likely utilize all your sick pays before payment of claims on short-term disability insurance. You are however entitled to receive retroactive benefits if your condition is getting worse over time. For example you are suffering from flu and you could not go to work for three days. Assuming your cold is getting worse every day and you are diagnosed with pneumonia and need to be hospitalized for three weeks. You are eligible to receive your short-term disability insurance benefit retroactive with your first sick pay. Individual short-term disability insurance is offered in very few cases.

You do not require short-term disability insurance or accident insurance if you have sufficient savings to (financially) survive throughout your short-term disability. As mentioned above short-term disability insurance is not easily available and is pretty expensive. Most people believe that they can comfortably survive from six months to a year with their savings, salary continuance or their parents’ help. Short-term disability insurance can be purchased both in a group and individually. An employer, professional group or an association can easily offer group coverage. However each short-term disability insurance policy requires the insured to work for a certain period (called service wait) before he is eligible to receive benefits. In case of group insurance you should have membership for a certain time period before you can qualify for professional or association short-term disability insurance. Individual short-term disability insurance policies are available from insurance brokers depending upon medical underwriting i.e. if you have not had medical treatment for a potentially disabling disease for the past 10 years you are eligible for the individual short-term disability insurance. Physician consultations and prescription medicines are included in medical treatment for this purpose.