Short Term vs Long Term Disability Insurance – Check Benefits, Types & Difference

In today’s world, it is difficult to survive without earning and to earn, one needs to stay fit and fine without any disability. Thus comes, the need for Disability Insurance, which helps to provide a financial shield to the policyholder, who meets any disability challenges and is unable to continue professional duties. Be it a permanent disability or a temporary one, with disability insurance, a bread earner of a family can ensure that the family’s financial stability is not compromised during the period of disability.  

What is Disability Insurance?

Disability insurance meaning in simple words, is a financial protection against any risk of disability that can hamper a person’s professional working ability. Through disability insurance, a person can get coverage for the monthly lost wages and even meet the medical expenses needed to treat the disability. In short, it aims to make life normal at least, financially for the one who suffers a temporary or permanent disability.

Why Opt for Insurance with Disability Rider Benefit?

Here are the main benefits of opting for a term insurance plan with a disability rider benefit:

• More flexibility to customize insurance coverage to meet your specific requirements. You can choose the length as well as the waiting period for these plans
• Guaranteed financial protection in case you meet an accident, and are unable to work. This kind of insurance rider benefits can help you maintain your financial stability and cover your medical expenses as well as lost wages
• Offers complete peace of mind that if anything goes wrong at work, you will not face a financial crisis due to your disability
• One of the most remarkable features of disability insurance is that it comes with a guaranteed renewal clause. It means that the policyholder can renew the policy and enjoy the same benefits, and the insurer cannot cancel it.

Two Types of Disability Insurance

Disability insurance is broadly divided into two types, and they are:

1. Short-Term Disability Insurance

As suggested by its name, short-term disability insurance offers coverage for a shorter period, in case of a temporary disability. Thus, the benefits of this kind of disability insurance policy offer benefits for a maximum of 2 years. The main types of injuries covered under short-term disability are injuries due to an accident or any long-term illness.

2. Long-Term Disability Insurance

On the other hand, long-term disability insurance is meant for those with a permanent or long-term disability. The sole aim of this type of disability insurance is to provide the policyholder with all the benefits of the policy for several years. This policy offers coverage against heart diseases, mental illness, tissue damage, and even cancer.

Difference Between Short-Term and Long-Term Disability Insurance

The table below shows you the clear short-term vs long-term disability insurance plan features:
 

Factor	Short-Term Disability Insurance	Long-Term Disability Insurance
Most Suitable Candidate	Anyone with a temporary disability	Anyone with a lifetime or prolonged disability
Coverage	From several weeks up to 2 years maximum	Several years in a row
Waiting Period	0-14 Days	Might take several weeks
Premium	Low premium rates for lower returns	High premium rates for higher returns

Which is Better for You: Short-Term or Long-Term Disability Insurance?

So, one should buy long-term disability insuranceor short-term disability insurance; which is better out of the two? Well, this is a tricky question! You must consider certain factors, as mentioned earlier in this post to decide which type of disability insurance will be perfect for you. In general terms, those who want a disability insurance plan with cheaper premiums even if they offer lower returns must go for a short-term disability insurance plan.

Whereas, those who want extra protection because they feel they are working at a higher-risk workplace, where there are higher chances of meeting a lifetime disability, must choose a long-term disability insurance plan. Both types of disability insurance plans will prepare you for a backup plan to meet any type of financial constraints owing to a disability in the future.

How to Buy a Disability Insurance?

In the case of a self-employed person, there is no scope for the employer to offer disability insurance. However, individuals working under some employers can check with the employer about the type of disability insurance they are willing to offer them. Alternatively, you may also buy a disability insurance rider with your individual term life insurance plan by paying an extra premium.