What is short-term disability insurance?

Short-term disability insurance can replace your income, but benefits don't last very long.

Zack SigelElissa

By

Zack Sigel

Zack Sigel

Managing Editor

Zack Sigel is a former managing editor at Policygenius who oversaw our mortgages, taxes, loans, banking, and investing verticals.

&Elissa Suh

Elissa Suh

Senior Editor & Disability Insurance Expert

Elissa Suh is a disability insurance expert and a former senior editor at Policygenius, where she also covered wills, trusts, and advance planning. Her work has appeared in MarketWatch, CNBC, PBS, Inverse, The Philadelphia Inquirer, and more.

Updated|3 min read

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Disability insurance protects you from the financial burden of losing your income if you become disabled or ill and can't work. It replaces your income with monthly benefit payments that cover about 60% of your salary.

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Short-term disability insurance only lasts a few months and you almost always get it from your employer. It's possible to purchase short-term disability insurance on your own, but it may be difficult and prohibitively expensive to do so. The main difference between short- and long-term disability insurance is how long you receive benefit payments. Long-term disability insurance lasts for years, possibly until you retire. 

Key Takeaways

  • After submitting a claim, you usually need to wait 14 days to get your first short-term disability payment.

  • A short-term policy can be too expensive for the average person to afford, but most people get one from work.

  • Long-term disability insurance is the best way to protection your income since it pays out longer.

What does short-term disability cover?

Short-term disability insurance provides coverage when you’re injured or have an illness that prevents you from working. Your policy should cover chronic problems, like back pain and heart disease, as well accidents that happen outside of work.

However, short-term disability doesn’t cover any injury you sustain while on the job, which is covered by Workers' Compensation. (Long-term disability insurance does cover such disabilities.)

Short-term disability can cover complications from pregnancy, though not pregnancy itself. You can take family leave instead of applying for disability for that. 

→ Learn more about what disability insurance covers

How much does short-term disability insurance pay?

Short-term disability typically pays out a benefit for three to six months, although some coverage may last an entire year. Like its name implies, long-term disability insurance lasts much longer. You’ll stop receiving benefit payments if you recover from your disability and can return to work.

How long you receive payments is called the benefit period. During that time, you'll receive approximately 60% of your pre-tax salary (roughly equivalent to your after-tax salary) as long as you’re unable to work. 

Short term disability waiting period

Short-term disability benefits kick in a lot sooner than long-term disability insurance because it has a shorter waiting period (elimination period), which is the time between when you become disabled and the day you start receiving benefits.

The waiting period for short-term disability insurance is usually no more than 14 days — with long-term disability insurance the average wait time is about three months.

If you don't think your savings can last that long, then short-term disability insurance may be worth it, since it can help cover your expenses almost immediately.

How to get short-term disability insurance

Many people receive short-term disability insurance through their employer. It’s often included as part of an employee benefits package. To claim short-term disability benefits, you need to file a claim with the insurance company or through your employer (usually the human resources department).

Some states require employers to provide short-term disability insurance for residents. State disability insurance is sometimes called temporary disability insurance, and the benefits are typically smaller than what you’d get from a private short-term disability policy. 

→ Learn about other types of disability insurance 

How much does short-term disability insurance cost?

Because short-term disability insurance is rarely sold in the individual market, no such rule-of-thumb exists, but you'll probably have to pay the same amount as long-term disability insurance — 1% to 3% of your income. These rates may be considerably cheaper, or free, if you get it from a group disability insurance plan through work.

The benefit period for short-term disability isn’t long enough to cover the time you’re out of work, so you’re better off getting long-term disability coverage. A licensed agent at Policygenius can help you get free disability quotes and find a policy that meets your needs.

Frequently asked questions

How does short-term disability work?

Short-term disability insurance protects your immediate income needs, usually for 26 weeks, after which a long-term disability can provide protection. Short-term policies can supplement long-term coverage, which provides more robust income protection.

How much are short-term disability benefits?

Short-term disability insurance benefits pay up to 60% of your income, and you usually get coverage through your employer for free. There may be a maximum benefit amount set by your policy.

How do I purchase short-term disability insurance?

Short-term disability insurance is typically part of your employee benefits package at little to no cost. Otherwise, it can be difficult to buy an individual policy.