Short Term Disability Benefits

By: Mary Thompson, Capstone Brokerage President, June 25, 2015

Why is having short term disability so Important?

Many people feel that the need for short term disability is minimal. What most don’t realize is that a disability can occur at any time. If it is severe enough a person may be prevented from working, leaving them unable to provide for their family. Short term disability can replace a percentage of one’s income in the initial period of an illness or accident.

What is Short Term disability

Short term disability will pay benefits out to a person who has a documented disability from a physician. The benefit is typically a percentage of your gross income that can be paid out in the event you are unable to work for a short period of time.
Many businesses have short term disability policies available to their employees; the premium simply comes out of an individual’s payroll. Short term disability excludes on the job injuries, which would be covered under a company’s Worker’s Compensation insurance.

How does short term disability work?

Typically, a short term policy will pay out 66% of the pre-disability base salary. The typical short term policy will last for 3-6 months. There is also normally a cap, meaning a max a person can receive per month. The waiting period to enact benefits is usually 0-14 days after becoming sick or disabled. Typically, if you suffer an illness it may take longer due to the need to show the illness is actually causing a disability.

What is a qualifying disability to receive benefits?

Simple things such as an injury received around your home, or a serious illness that prevents you from going to work are both qualifying events. Illnesses are a little trickier to start coverage; usually a person will have to be out of work for a set amount of time, and have a doctor’s note stating the illness and the need to recover for a longer period of time. A person can also have a surgery that would leave them out of work for a set amount of time, unable to complete work duties. It can be a simple as a common cold that turns into pneumonia requiring hospitalization preventing a person from preforming their job duties.

Having short term disability insurance can really benefit everyone, even the younger group who feel that they are immune from a disability based on age and general overall health. The unexpected can happen to anyone. Disabled means you are unable to perform all the material duties of your job description based on either mental or physical injury; this is not limited to any one group of people which is why it is beneficial for all individual to have a short term disability policy in place.

Small businesses and large corporations should all consider offering their employees options for short term disability. It is a relatively inexpensive safeguard to protect ones employees from suffering financially if they are unable to work due to injury or illness. Next month I will talk about the importance of long term disability and why it is so important.