Disability Insurance: Should You Buy a Long-Term Policy?
It is not surprising that many consumers believe that long term disability insurance is the only type of disability insurance available. Long term is by far the most common type purchased by consumers as well as the most common type offered by employers and membership organizations. However, there are short term disability insurance polices on the market and they can be useful when needed. This article examines some of the more common aspects between the two types of disability insurance.
As mentioned above, long term disability insurance is the more commonly used type and it protects you should you become disabled through illness or injury. These policies usually begin to take effect once any short term disability policies end. The phrase "long term" can be misleading as some of these policies may only last 5 or 10 years. If you have the option, you want one that covers you until age 65.
Short term disability insurance, on the other hand, will cover a certain percentage of your lost salary if you are injured or become too ill to work. These benefit payments usually begin once your sick leave pay runs out.
Short term benefits often vary as time passes. Early on you will probably receive a large percentage of your usual pay, but as time goes on this amount may decrease. In many cases, short term policies last for six months or so before they are terminated.
It should be noted that short term disability insurance can come to you in many ways. For example, sick leave from work can be considered short term in nature. Worker's compensation is also another form of short term disability insurance. In fact, worker's compensation may be the most well-known type of short term disability insurance. Most employers are required to provide worker's compensation benefits that replace a portion of your income if you are unable to work, due to an accident that occurs in the workplace or while on company time doing company work.
Your automobile insurance may also be a type of short term disability insurance if they pay you for injuries sustained in an accident. Of course, if the other driver is at fault, you may be able to recover damages from them or their insurance company.
Long term disability insurance is quite another type of insurance altogether. Long term policies may not begin until you have exhausted all other shorter term services, but once it does begin it is truly for the long haul, meaning years. While short term policies are used to help you get through a rough patch, long term is used to help you keep your home, your automobile, and your lifestyle.
Short term disability insurance is usually provided to you through secondary means, such as through your employer's participation with worker's compensation or through your automobile insurance. Long term disability insurance, on the other hand, is bought as its own entity. This purchase can be through your employer or it can be purchased by an individual in which case it is known as private long term disability insurance.
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