How short-term disability works
Short-term disability typically replaces 60 to 70 percent of your income for three to six months after a brief waiting period. It is most useful for predictable events such as recovery from surgery or maternity leave. Many employers offer it as a low-cost group benefit.
How long-term disability works
Long-term disability begins after the short-term policy ends and can pay benefits for years — sometimes until retirement age. Benefits typically replace 50 to 70 percent of income. The most important provision to read is the definition of disability: own-occupation policies pay if you cannot perform your specific job, while any-occupation policies require that you cannot perform any reasonable work.
Which one matters most
Long-term disability is the policy that protects you against catastrophic income loss. Short-term disability is convenient but rarely financially decisive. If you have to choose one, choose long-term.
Key takeaways
- Disability insurance replaces income when you cannot work.
- Short-term covers months; long-term can cover decades.
- Read the definition of disability — own-occupation is more protective.
- Long-term coverage is the more critical of the two.
This article is for general educational purposes and is not legal, financial, or insurance advice. Consult a licensed professional for decisions specific to your situation.