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What is the difference between short- and long-term disability?

On Behalf of | Jan 7, 2019 | Insurance Law |

Disability insurance provides coverage to workers in Washington in the event that they become unable to work due to a disability. You can purchase disability insurance privately, or you may have the option to obtain it through your employer. According to FindLaw, disability insurance policies differ in the duration of benefits. A short-term disability policy will cover you for up to two years, while a long-term policy may provide benefits for decades. Depending on a number of factors, including your budget, you may opt for either short-term or long-term disability coverage, or you may choose both. Some workers obtain one type of coverage from an employer and purchase the other type of coverage privately. 

One advantage of short-term disability coverage is that there is a shorter waiting period before you can start receiving benefits; it can take up to 14 weeks, but you may start receiving benefits within a matter of days after filing a claim. With short-term benefits, you stand to receive approximately 80 percent of your regular salary initially, but the remaining payments are likely to be lower. Because this type of policy is only intended to cover you for a temporary period while you recover from an illness or injury, you can only receive these benefits for two years at maximum.

With a long-term policy, you receive benefits of only about 70 percent of your salary, but the amount of the payments is more steady. It can take longer for you to receive benefits; usually, you will start receiving benefits within three to six months, but it can take up to two years. However, once you start receiving benefits from a long-term policy, they can endure until you reach age 75. A disadvantage of long-term disability insurance policies is that their premiums are typically much higher than short-term coverage.

The information in this article is not intended as legal advice but provided for educational purposes only.