The Difference Between Short And Long-Term Disability Insurance

The Difference Between Short and Long Term Disability Insurance | Badre Law PC

Disability is a condition that is feared more than death by some people, especially those who live highly active work lives. For most people though, disability is a temporary condition that restricts one from regular movement or activity at work. Most working professionals, especially those in healthcare, depend on their good health to earn their potential income but what happens when they suffer a disability that prevents them from working? This is where disability insurance comes in with income replacement coverage for the period of disability or for a shorter duration depending on the policy that the person suffering the disability had bought. This article will look into the differences between long term and short term disability insurance. 

Different tenures of disability insurance 

Doctors disability insurance can be bought either as a short term or as a long term policy. There is no specific reason for any doctor to buy a short term disability policy other than to fulfill a formality, since the benefit period in a short term policy is not more than 6 months. Studies show that the average duration of disability in the country is over two and a half years. In this respect, a short term policy won’t meet a doctor’s requirement in the current Covid scenario. It is preferable to go for a longer term disability policy that offers different tenures from two years right up to 10 years and more. Research shows that almost a third of US workers like a marketing agency in Texas will have faced disability for at least 3 months at some point of time in their lives, but disability insurance is still not a priority even for someone who does web design in Babylon, NY. 

When can you get the benefit of disability insurance? 

The benefits of a short term disability insurance become applicable within a couple of weeks at the most. For long term policies, the benefits do not start earlier than a month at least and can go up to 2 years. In most cases, the benefits don’t start before 3 months although the different providers offer varying ranges of time before the benefits become applicable. The differences in time for the benefits to become applicable are also due to the cost of the policy opted. Policies that offer longer time for the benefits to become applicable are cheaper than those were the benefits start earlier. 

Different kinds of coverage offered by disability insurance 

The risk coverage in healthcare professionals disability insurance is based on the insured person’s net income. The compensation amount is usually up to 80% of the insured person’s net income in a short term policy and up to 60% of net income in a long term policy. If you want 100% income replacement, then your premium would be much higher and almost unsustainable. Most providers offer you a certain amount of flexibility to fix the coverage amount as per your requirement. Your premium would be proportionately lower when you opt for a lower coverage amount. 

You need to remember that this is a contingency for which you are paying a price and you basically have to scrape through this tough period of your life with minimum cost. Work out your expenses rationally because you also need to factor in the healthcare insurance costs related to your disability. It’s not your income but compensation and it’s a situation you want to put behind at the earliest. 


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