Missing work because of an illness is a common occurrence. If you are fortunate, then you can use sick days or vacation time to cover missed days. But what happens when you’re out of the office for several weeks? Most people do not have enough savings to cover more than a few weeks of expenses.
Disability coverage comes in handy because it protects a portion of your income when you are unable to work. Disability covers up to 60% of income, and can help avoid financial disaster. Most employers offer short- and long-term disability coverage as part of a benefits package.
Short-term disability (STD) is for short-term illness. Depending on the policy, coverage will begin one to fourteen days after you leave work because of the illness. Short-term disability covers most or all of your income for a short period of time. If you need an extended break from work, then you’ll need long-term disability.
Long-term disability (LTD) provides a portion of income when you miss work for an extended period. Worker's Compensation may pay coverage if you’re hurt on the job, but it’s not the same as LTD. LTD is for non-work related conditions.
Disability does not cover medical needs like health insurance, but provides income to cover expenses. Social Security Disability Insurance (SSDI) is available as well, but approval takes several months and even longer for payments to begin.
Disability is an important part of insurance coverage.