What Is Short-term Disability Insurance and Do You Need It?

Disability Did you know that every year, approximately 5% of Americans will experience a short-term disability due to injury or illness that lasts less than six months?

Not having short-term disability insurance can leave you in a difficult situation. If you don’t have short-term disability coverage, it’s essential to learn more about this type of coverage and when you may need it. This way, you’ll be able to focus on your health if you can’t work due to an unexpected illness or injury.

Keep reading this guide to learn everything you need to know about short-term disability insurance!

What Is Short-Term Disability Insurance?

Short-term disability insurance benefits are one of the two types of disability coverage available. The other type of disability coverage is long-term disability insurance.

When you can’t work due to an illness or injury, short-term disability (STD) will give you a percentage of your income. Typically, this percentage can range between 50% and 80%, depending on your plan type.

You can use STD benefits to pay for things like:

  • Mortgage or rent payment
  • Credit card payments
  • Loan payments
  • Utilities
  • Groceries
  • Personal needs

Where Do You Get Short-Term Disability Insurance?

Most of the time, people get STD as part of an insurance plan with their employer. Some people pay for private STD policies out of their pocket.

You can find STD coverage through companies that offer health insurance. The good thing about private STD coverage is that it doesn’t end if you change employment. You get to decide how much coverage you want, how long you want to be covered, and how much your premiums will be.

Remember to consider your overall health and financial situation to find the best short-term disability insurance.

To learn more about STD disability policies and get a quote, check out Woligo Disability Insurance for more information.

How Does Short-Term Disability Insurance Work?

While short-term disability plans are different based on the policy, they all work generally work in a similar way. They also have specific terms and features, which include:

Premium Costs

Short-term disability insurance cost varies for each policy. Usually, it’s based on the total benefit amount of the policy.

If you get STD through your employer, your employer will pay a specific premium amount, and you’ll typically pay a premium that’s deducted from your paycheck each month.

Benefit Amount

The benefit amount is the sum of money you’ll get each month you cannot work. Generally, this amount won’t replace your salary, but it can sometimes replace up to 80% of your regular pay.

You’ll also find STD plans that have stepped benefits. With stepped benefits, you’ll get 80% of your pay for the first eight weeks; then, it will decrease to 70% for the next eight weeks.

Waiting Period

STD plans also have a waiting period, which is the period you have to wait before you can receive benefits.

STD waiting periods typically range from 7 to 30 days, with 14 days being the most common. If you get STD through your employer, you’ll need to use sick days or vacation days to get paid until you can receive STD benefits.

Private STD policies also have a waiting period, which can vary depending on the company.

Length of Benefit Term

For STD policies, there is a length of time you can receive benefits. Most plans will pay benefits for 3 to 6 months. However, some STD plans will pay benefits for longer than six months but won’t pay benefits over 12 months.

If you need disability benefits for longer than a year, you’ll need to switch to a long-term disability plan.

Disability Definition

It’s essential to realize that each STD disability policy will define what is considered a disability. In most cases, a disability is defined as a condition that prevents you from physically being able to do your job.

However, this can vary, so you’ll need to check your plan for specific details. Most plans cover conditions such as:

  • Back problems
  • Depression
  • Bipolar disorder
  • Heart disease
  • Neck disorders
  • Lupus
  • Crohn’s disease

Most plans will also base your coverage on how significant your symptoms are, not just the condition you’re diagnosed with. You’ll typically need a diagnosis, severe symptoms, and a treatment plan for an STD policy to pay your benefits.

Keep in mind that a short-term disability plan won’t cover an injury that occurs on the job. Job-related injuries fall under workers’ compensation insurance.

Filing a Short-Term Disability Claim

STD disability benefits aren’t automatic. You’ll need to take specific steps to file your claim if you have an illness or injury.

If you have STD through your employer, your first step is to contact the HR department to get the paperwork you need to file a claim. If you have a private plan, you’ll typically find what steps you need to take in your policy documents. Many times you’ll be able to file a claim online.

See a Doctor

You’ll also need to see a doctor for a diagnosis and treatment plan. Your doctor will document the symptoms you’re experiencing. Depending on your condition, you may need bloodwork and imaging tests like an X-ray or CT scan.

Send Medical Records

Once you see a doctor, you’ll need to send medical records to the insurance company so they can review the claim.

The medical documents should clearly state your diagnosis, symptoms, and how this condition prevents you from performing your work duties.

Approval or Denial of Your Claim

The insurance company will accept or deny the claim based on different factors. Most of the time, claims are denied if you don’t provide enough medical evidence to support your claim.

Other reasons are usually due to your symptoms not being serious enough or your treatment doesn’t indicate that you have a serious condition.

If your claim is denied, you can appeal the denial. You’ll typically need to appeal the denial within 90 days. Appealing a claim involves returning to your doctor to get additional documentation on your symptoms and treatment.

Understanding Short-Term Disability Insurance

Now that you understand more about short-term disability insurance, you’ll be better able to decide on a policy that works for you.

If you need to purchase an STD plan, be sure to do your research on the different companies and the policies they offer.

For more health and lifestyle tips, be sure to check out the rest of our blog today!