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Updated
Short term | Long term | |
---|---|---|
Average cost | 1% to 3% of your income | 1% to 3% of your income |
Coverage amount | 60% to 80% of your income | 40% to 60% of your income |
Elimination period | 1 to 90 days | 30 to 730 days |
Benefit period | 1 to 12 months | 24 months up to retirement age |
Short-term disability insurance normally replaces 60% to 80% of your pre-disability income, but only pays your disability benefit for one to 12 months, depending on which plan you select.
Long-term disability has a lower benefit amount than short term disability, paying out 40% to 60% of your predisability income. But the benefit period lasts much longer. Choose a benefit period of two, five or 10 years, or even up to retirement age.
Short-term disability
Long-term disability
Short-term disability
Long-term disability
Type of Insurance | Consider buying if… |
---|---|
Short-term disability | You don’t have any other source of money to get you through a few months without a paycheck. |
Long-term disability | You want coverage for peace of mind if a disability lasts longer than one year. |
Yes, you can buy both short-term and long-term disability. In fact, having both types of disability policies provides you with the greatest amount of coverage if you suffer a disability. Short-term disability provides you with immediate cash that’s up to 80% of your income, while long-term disability provides money after you complete your waiting period — typically 90 days.
Most insurers offer both short and long-term disability plans, so you could buy both policies from the same company. Doing so would likely give you the most streamlined claims process, though it may be cheaper to buy from different companies. And if you have one plan through your employer, you’ll probably need to buy the other plan through a different company.
Having both short- and long-term disability plans gives you the most complete coverage in case you have to miss work because of a temporary or permanent disability. Both policies cover you for separate time periods, though long-term disability pays out a benefit for a longer period of time.
Before settling on a policy, be sure to compare disability insurance companies to find the best one for you.
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