Short-term vs. Long-term Disability Insurance: What’s the Difference?

Understanding how to protect your income if you’re unable to work due to illness or injury is an important part of financial planning. Regardless of your commitment to a safe, responsible or risk-averse lifestyle, accidents and unexpected situations may inevitably impact your ability to work and earn a living. In such situations, disability insurance can make all the difference, but which type might you need?

What Is Short-term Disability Insurance?

Short-term disability insurance is designed to replace a portion of your income if you’re temporarily unable to work due to a covered medical condition. Coverage typically begins after a short waiting period (e.g., a week or two) and provides benefits for a limited duration, usually between three and six months. Common reasons for short-term disability claims include recovery from surgery, childbirth or a minor and nonwork-related injury.

What Is Long-term Disability Insurance?

In contrast, long-term disability insurance can offer income protection for more serious or lasting health issues. These policies may include a waiting period that can range from several weeks to a few months. Once payouts begin, your coverage may continue to provide benefits for several years or even until retirement age, depending on your policy’s terms. Long-term disability insurance is often critical for those who are diagnosed with chronic or serious illnesses or suffer catastrophic injuries.

Which Type Is Right for You?

Choosing between short-term and long-term disability insurance typically depends on your unique circumstances. Consider your financial situation, health, occupation, hobbies, lifestyle and risk tolerance. For example, if you enjoy dangerous recreational activities, such as rock climbing and motor sports, you may be in greater need of robust coverage.

In many cases, individuals may choose to purchase and maintain both types, as a short-term policy can start offering financial assistance more quickly, while long-term coverage kicks in down the road, if necessary. At Reinholdt & O'Harra Insurance, our team can help you evaluate your needs and find the right coverage.

Learn More

If you’re looking for disability insurance, we’re here to answer your questions and guide you through your options. Contact us today to get started.

This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.