How to choose the right short-term disability insurance

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What is Short-Term Disability Insurance?

Short-term disability insurance is a type of coverage that provides income replacement if you become unable to work due to an injury or illness. It is designed to provide financial support during a period of temporary disability, typically lasting up to six months. This type of insurance can be particularly important for those who do not have significant savings or other sources of income to fall back on in the event of a disability.

Short-term disability insurance can be purchased on an individual basis or provided by an employer as part of a benefits package. If you are considering purchasing a policy, it is important to understand the key factors that can impact the coverage and benefits you receive.

Factors to Consider When Choosing Short-Term Disability Insurance

Benefit Amount

The benefit amount is the amount of money you'll receive each week or month if you become disabled and are unable to work. When choosing a policy, consider how much income you would need to replace in order to maintain your current standard of living. Most policies provide benefits that range from 40% to 70% of your pre-disability income.

It's important to note that the benefit amount may be subject to a cap, which limits the maximum amount of benefits you can receive. In addition, some policies may offer a graded benefit, which means that the benefit amount decreases over time. For example, you may receive 100% of your income for the first month, 80% for the second month, and so on.

Waiting Period

The waiting period is the amount of time you must wait before your benefits kick in. Waiting periods typically range from 0 to 14 days, with longer waiting periods resulting in lower premiums. When choosing a waiting period, consider how long you could sustain yourself financially without income. If you have an emergency fund or other sources of income, you may be able to choose a longer waiting period and save on premiums.

It's important to note that the waiting period is not the same as the elimination period. The elimination period is the amount of time you must be disabled before you are eligible for benefits. For short-term disability insurance, the elimination period is typically the same as the waiting period.

Coverage Length

Short-term disability insurance policies typically provide benefits for up to six months, but some policies may offer coverage for up to a year. Consider how long you would need benefits to last in the event of a disability. If you have a high-risk job or health condition, you may want to opt for a longer coverage period.

It's important to note that the coverage length may be subject to a cap, which limits the maximum amount of time you can receive benefits. In addition, some policies may have a maximum benefit period per disability, which means that if you become disabled again after your benefits have ended, you may not be eligible for additional benefits.

Definition of Disability

The definition of disability is a key factor to consider when choosing a short-term disability insurance policy. Some policies have a more restrictive definition of disability, which may make it more difficult to qualify for benefits. Look for policies that define disability as the inability to perform the duties of your own occupation, rather than any occupation.

It's important to note that the definition of disability may vary depending on the policy. Some policies may also have a partial disability provision, which provides benefits if you are able to work but are earning less than your pre-disability income.


Premiums are the amount of money you'll pay for your short-term disability insurance policy. Premiums can vary widely depending on the coverage level, waiting period, and benefit amount. When choosing a policy, consider how much you can afford to pay each month, and look for policies that fit within your budget.

It's important to note that premiums may increase over time, particularly if you have a policy that includes a guaranteed renewable provision. This provision allows the insurer to renew your policy each year, but may also allow them to increase your premiums.

Tips for Choosing the Right Short-Term Disability Insurance Policy

Now that you understand the key factors to consider when choosing short-term disability insurance, here are some tips to help you make the right decision:

  • Shop around: Don't settle for the first policy you come across. Shop around and compare policies from different providers to find the best coverage and rates.
  • Read the fine print: Make sure you understand the terms and conditions of the policy before you sign up. Pay attention to exclusions, limitations, and other details that could impact your coverage.
  • Consider your occupation: If you have a high-risk job, such as a construction worker or firefighter, you may want to opt for a policy with a shorter waiting period and more generous benefits.
  • Check for employer-provided coverage: Some employers offer short-term disability insurance as part of their benefits package. Check with your HR department to see if this is an option for you.
  • Don't skimp on coverage: While it may be tempting to choose a policy with lower premiums, make sure you're not sacrificing important coverage in the process. Remember, the purpose of short-term disability insurance is to provide income replacement when you need it most.


Choosing the right short-term disability insurance policy requires careful consideration of several key factors, including benefit amount, waiting period, coverage length, definition of disability, and premiums. By taking the time to research your options and compare policies, you can find the coverage that best meets your needs and provides peace of mind in the event of a disability. Remember, the right policy can provide financial support during a difficult time, allowing you to focus on your recovery and return to work when you're ready.