Your Disability Insurance

Disability insurance is designed to protect a wage earner’s income stream on account of a disabling accident or illness. There are two types of disability insurance: short-term and long-term. While both types will typically replace from 50 to 70 percent of pre-tax income lost on account of a disability, short-term disability insurance will often pay up to a specified amount.

Short-term disability insurance typically lasts 90 days to two years. Coverage usually begins one to 14 days after the onset of a disability.

Long-term disability insurance usually starts 30 to 180 days after the onset of a disability. How long it lasts depends on the policy, but usually up to two years.

If a person is covered by short- and long-term disability insurance, the short-term plan usually stops when the long-term plan starts. Also, employees may have to use sick days to take time off of work (due to the disability) before disability insurance benefits begin.