There are two primary types of disability insurance. The first type of disability insurance is short-term disability insurance. The second type is long-term disability insurance.
Both types of disability insurance provide paycheck protection by helping to protect a part of your paycheck in case you get disabled and can’t work due to a sickness or injury.
Let’s take a closer look at both of these types of disability insurance.
Short-term disability insurance
Short-term disability insurance helps provide income protection for shorter term injuries and medical illnesses that prevent you from working.
Most short-term disability plans kick in after 1-2 weeks and have a benefit duration for three to six months.
Long-term disability insurance
Long term disability insurance kicks in after your short term disability insurance ends.
This means that it can begin making disability payments at the end of a three to six month waiting period.
If both short-term and long-term disability insurance is offered at the same time, these benefits are set up so that he waiting period for the long term disability insurance matches the benefit duration of the short-term disability insurance.
The duration of the long term disability benefits can be anywhere from 2 years to social security normal retirement age.
Conclusion
Your paycheck is the most valuable asset many employees have. It’s not unusual for employees to live paycheck to paycheck. If they can’t work due to an accident or illness, they won’t be able to pay the bills for food, rent, insurance and other household needs.
This makes disability insurance a much needed employee benefit for employees to enroll in.
