Sometimes, a loved one might fall at home or end up with a serious illness. For example, maybe your parent is dealing with chemotherapy for the next few months, or your uncle broke his leg. When this happens, your loved one might experience a long financial difficulty. They may even lose their job entirely.
With short-term disability insurance, your loved one can still have a financial safety net while they recover. Not only that, if you suffer a severe medical condition, you can receive benefits while you recover. How does short-term disability insurance work?
A short-term disability is a temporary condition that prevents a person from performing their regular work duties due to illness, injury, or a medical condition. This type of disability typically lasts for a limited period, usually a few weeks to several months, after which the individual is expected to recover and return to work.
Illnesses, injuries, or medical conditions that might qualify for short-term disability typically include:
Those with a short-term disability may have access to short-term disability insurance that provides partial income replacement for those temporarily unable to work. Benefits typically cover a portion of the individual's salary for a short duration, usually ranging from a few weeks to up to six months, depending on the policy.
To be eligible for benefits, an employee typically needs to be unable to perform their regular job because of a medical condition and meet the policy's requirements, such as working for the company for a minimum amount of time.
Eligibility requirements for short-term disability insurance typically include the following:
It's worth noting that if a worker gets hurt on the job, worker's compensation will cover the wages, not short-term disability. However, some companies will give your care recipient a combination of benefits. Workers' compensation is available in most states.
When a caregiver takes time off to care for a sick relative, they don't qualify for short-term disability insurance. Instead, they may want to take advantage of the Family and Medical Leave Act.
Short-term disability benefits typically last from a few weeks to up to six months, depending on the specific policy. Some policies may offer benefits for a shorter duration, such as three months, while others may extend coverage for up to a year, but six months is the most common duration. The exact length of time will be specified in the individual insurance policy.
Your doctor's opinion on how long it will take for you or your loved one to get better is very important to the insurance company. If you follow your doctor's orders and go to all appointments, it shows that you're serious about getting better, and you'll likely get benefits for a longer time.
Short-term disability insurance will help your care recipient in several ways. Often, up to 40-70% of wages are paid. The amount paid is determined by the policy you select and the terms of your coverage.
To apply for short-term disability insurance, first check with your employer to determine if short-term disability coverage is part of your benefits package. If it is, you will typically need to fill out an application form provided by your human resources department.
This form will require personal information and details about your employment and medical condition. You will also need a medical certification from your healthcare provider confirming your disability and your inability to work. Submit the completed application and medical certification to your employer or directly to the insurance company, following their specific procedures.
If you purchase a policy independently, contact the insurance provider to obtain and complete the necessary application forms. After submission, there may be a waiting period before benefits begin, so it's important to apply as soon as you anticipate needing coverage. Throughout the process, ensure you keep copies of all documents and maintain communication with your employer or insurance provider to track the status of your application.
There is usually a waiting period, called the elimination period, between the onset of a disability and when the benefit payments begin. This period typically starts from the first day the employee cannot work due to a covered condition.
The elimination period can range from 1 to 14 days, depending on the specific policy. The employee will not receive benefits during this time, but it does not affect the total duration of coverage received after the waiting period ends.
The elimination period is something to consider when choosing a short-term disability insurance plan, as it determines how quickly benefits will be available in the event of a disability.
Consider factors like the elimination period (the waiting time before benefits begin), benefit amount, coverage duration, and premium cost when choosing a plan. Additionally, evaluate the policy's definitions of disability, exclusions or limitations, and the claims process to ensure it aligns with your needs.
While short-term disability insurance is a valuable option for many, there are alternative methods to ensure financial stability during periods of temporary disability:
At Givers, we are committed to providing education and resources to help caregivers and their loved ones make informed decisions. Understanding your options and finding the right support can provide peace of mind, allowing you to focus on what matters most—caring for your family.
