While short-term disability insurance doesn’t offer as much protection as a long-term disability policy, it’s still worth having short-term disability insurance, especially if you get coverage for free through your employer.
Should you get short-term disability insurance?
You should get short-term disability insurance if it’s offered through your work. Your employee benefits may include discounted or free short-term disability insurance.
There’s no downside to group short-term insurance through work, but if your employer doesn’t offer coverage and you can live on your savings for three to six months, you may not need short-term disability insurance.
Short-term disability insurance can be expensive and time-consuming to get yourself, and it only lasts up to one year at the most. There are also fewer companies offering private short-term disability insurance compared to long-term disability insurance, which can make it harder to compare quotes and find a great deal on a short-term policy.
What does short-term disability insurance cover?
Short-term disability insurance replaces your income while you can’t work because of an injury or illness. You can use your disability insurance payments on your regular expenses, like rent, groceries, mortgage payments, subscription services, and childcare.
Short-term disability insurance covers any disabling event that keeps you out of work, like:
A broken bone keeps you from being able to type for a few months
An old back injury flames up and makes it hard to stand
You’re put on bedrest during pregnancy and can’t go into work
You have a concussion after a car accident and can’t look at screens for a few weeks
You only get short-term disability benefits for a few months, even if you’re unable to work for longer, but it can still be a very affordable way to protect yourself, your dependents, and your savings in case of an emergency.
Do you need short-term and long-term disability insurance?
Yes, having both short-term and long-term disability insurance offers the most complete protection. Short-term disability insurance through your employer pairs well with an individual long-term disability policy.
Long-term disability insurance also replaces your income if you can’t work, just like short-term disability. But unlike short-term disability insurance, your long-term policy can cover you for years, even until you retire.
Usually you won’t receive any long-term benefits until 90 days after you become disabled — though this waiting period can be up to two years. Short-term disability insurance is a good way to fill this coverage gap and make sure you still receive payments.
What if you can’t get short-term disability insurance from an employer?
If your employer doesn’t offer short-term disability insurance, you can get your own short-term disability plan. You can also get critical illness or accident insurance, which pays benefits after a serious injury or medical emergency, like a heart attack or stroke.
Another alternative to employer-provided short-term disability insurance is temporary disability insurance through your state. If you live in California, Hawaii, New Jersey, New York, or Rhode Island, you can get some short-term public benefits.
The coverage you get from a temporary disability plan isn’t much. For example, New York only covers up to $170 a week. Still, it’s worth it if you can get coverage where you live.
You can also prepare for emergencies by setting up your own emergency fund to cover out-of-pocket expenses while you’re out of work.
Cost of short-term disability insurance
Short-term disability insurance costs 1% to 3% of your income, assuming you don’t get it for less through an employer. A short-term disability policy can cost the same as long-term disability insurance, even though the benefit period is much shorter.
Your short-term disability may be even more expensive if you’re older, a smoker, or you buy a policy with lots of extra coverage added (these optional add-ons are called insurance riders).
Cost of disability insurance
$63 to $188 per month
$83 to $250 per month
$104 to $313 per month
$125 to $375 per month
$146 to $438 per month
$167 to $500 per month
$188 to $563 per month
$208 to $625 per month
$229 to $688 per month
$250 to $750 per month