Short-term disability is defined differently from long-term disability based on the length of the payments and other factors. There are advantages and disadvantages of each type of insurance policy and some people have both. Understanding the similarities and differences helpful in choosing the right policy for you and your family.
Differences between short-term and long-term disability
Short-term disability provides temporary relief for a covered illness or injury. Recipients are required to have a partial disability. The average payment terms vary from three months to two years. The policy lasts until the person recovers from the disability or until the benefits run out.
Long-term disability benefits last longer than one year until the person retires, dies or returns to work. The types of covered medical conditions include cancer, kidney disease, Alzheimer’s disease and other long-term illnesses. Long-term disability covers a total disability and is designed for a permanent medical condition. The recipient is expected to be out of work for longer than a year and past the term of a short-term benefit period.
Short-term disability provides a higher percentage of compensation due to its shorter terms. Longer-term payments are reduced and drawn out over a long period of time. However, some beneficiaries say that long-term disability insurance is more affordable and provides a wider range of coverage.
There are different types of benefits that are designed for more than one type of disabled person. Insurance programs have strict definitions for a disability and additional terms that define who qualifies. Disability is further classified as short-term or long-term disability based on the type of disability, the costs of payments and the duration of payments.