No one wants to become disabled for any amount of time, but
accidents happen, which is why disability insurance is an option. Long-term and
short-term disabilities can both destroy you financially if you aren't
prepared. If you want to better protect yourself and your family's finances,
keep reading to learn more about the differences between long-term and
short-term disability insurance.
How Long Does Each Type of Disability Coverage Last?
Disabilities vary, and while some people may struggle for
life, others may be expected to recover after only a few months. For example,
if you broke both legs, you may be unable to work while they heal. However,
your legs won't take years to heal, therefore, you'd need short-term disability
coverage, which covers disabilities expected to last about three to six months
or up to a year in certain situations.
Long-term disability insurance covers disabilities that are
expected to last a year or longer (or they've already lasted a year or longer).
People who receive long-term disability benefits may need benefits for five,
ten, twenty years, or until retirement.
What Disabilities Are Usually Covered?
Naturally, disabilities that are covered under short-term
disability are temporary and either go away on their own or respond well to
treatment. Many short-term disability policies exclude mental illness,
including depression and anxiety. However, covered conditions may include
pregnancy, pregnancy complications, digestive orders, surgery recovery, and a
short-term illness.
Long-term disability insurance, in turn, covers disabilities
that can affect you for the rest of your life. This is where people with mental
illness often turn when they are unable to work. It's also a great option for
people with cancer. Many long-term disability claims are associated with musculoskeletal
disorders like arthritis. Pregnancy may be covered if the mother has severe
complications during and after the pregnancy.
How Much Is Disability Insurance?
The cost of disability insurance relies on many factors,
such as age, profession, gender, and overall health. Typically, the older you
are, the worse your health, or the more dangerous your job, the higher the
premiums. In addition, premiums for women tend to be higher than premiums for
men. Therefore, a woman nearing retirement with underlying health conditions
working in light labor will pay more than a young, healthy male working in a
professional setting.
Your age, however, is the biggest factor in determining your
premium, so if you are 40 years old, expect to pay around $82, depending on
other factors. However, just by waiting ten years, the premium boosts to $129 a
month on average.
With long-term and short-term disability, expect to pay
about 1-3 percent of your annual salary. Depending on your salary and how much
coverage you want, you may pay between $25 and $500 a month. With short-term
disability insurance, however, the cost may depend on whether you are covered
by your employer or have access to a subsidized plan.
If you file for Social Security Disability, however, you
won't pay a premium.
How Do You Get Covered?
Most people who want long-term disability coverage buy their
own plan. However, employers often cover some or all the cost of short-term
disability coverage. Even if your employer doesn't cover the entire cost, the
premiums may be lower because of a group discount. Of couse, if your employer
doesn't cover short-term disability, you can purchase it out-of-pocket too.
In nearly every case, you need to have short-term disability
coverage before you are disabled. However, if you develop a long-term
disability and have no insurance, you have an alternative: Social Security
Disability benefits. This money is provided by the government for people who
are unable to work due to a long-term disability. Social Security Disability benefits
do not cover short-term disabilities.
Anyone can fall victim to a disability at any time.
Depending on the expected length of the disability, you may be better suited
for short-term or you may need long-term disability. If you would like to learn
more, or if you need our help in fighting to get your claim approved, contact usat the Law Offices
of James B. Gillespie, Jr., PLLC, today.
