Accident & Health Insurance

Short-Term Disability Insurance: What is it and how may it help?

4 min read
Feb 02, 2024

Are you prepared financially if an event prevents you from earning a consistent paycheck? For instance, what if an injury or illness left you temporarily disabled and unable to work? What if a pregnancy is in your future? Did you know short-term disability insurance (STD) covers both uncomplicated pregnancy and any complications of pregnancy?

According to the Council for Disability Awareness, approximately 5% of working Americans experience a short-term disability each year.1 STD insurance may help replace lost income when the unforeseen impacts you and your family's livelihood.

What is short-term disability insurance?

Short-term disability insurance may replace all or a percentage of your income when you’re temporarily unable to work due to a non-work-related illness, injury, or medical condition. The benefit is paid directly to you, so you decide how best to allocate these funds. This can help cover everyday living expenses — such as rent, mortgage payments, and groceries — while you’re momentarily absent from work.

How does short-term disability insurance work?

Short-term disability insurance may be offered by an employer as part of their employee benefits package. If your employer doesn’t offer this benefit, you can purchase a policydirectly through an insurance provider.2

Similar to other types of insurance, you typically pay a monthly premium for coverage. If you get short-term disability insurance as part of your work benefits, your employer might pay for the full cost of premiums, you may share the costs and have the payments deducted from your paycheck, or you may be responsible for the entire premium.

If you have a qualifying disability and your short-term disability insurance provider approves your claim, your weekly payouts are sent directly to you to use as you see fit. Benefits will vary by provider and policy, but the weekly benefit will generally range from 40% to 70% of your pre-disability earnings and last around nine weeks to 6 months.2 Keep in mind that benefit amounts and duration of coverage can vary. Review the plan details of your policy to learn the specifics around coverage.

If you received other types of aid, such as from a state-mandated disability or paid medical leave benefit, the payment you receive from your short-term disability insurance may be offset by it. So your payments from your policy may be less than the full amount.

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What’s the difference between short-term and long-term disability insurance?

While short-term disability is intended to be used for a short period of time, long-term disability offers more extended coverage — typically for as long as you remain disabled or unable to work.

Here are some key differences between the two disability benefits:3


Short-term disability

Long-term disability

Benefit period

Coverage may last up to a six months (but this can vary by policy).

 Benefits can last for a few years or up to Social Security normal retirement age.

Benefit income replacement level

Benefits may replace a higher percentage of your disability income (but this can vary based on the level of coverage).

Benefits may replace a slightly lower percentage of your disability income (this can vary based on the level of coverage).

Elimination period

Benefits begin after a shorter period of time after your date of disability (e.g., 14 days being the average).

Benefits begin after a longer period of time (e.g., 90 days being the average) or may begin after short-term disability insurance benefits end.

Injuries while working

Typically will not cover claims for injuries that occur while working

Typically will cover claims for injuries that occur while working, however the amount received from any Workers’ Compensation will be deducted from the LTD benefits.

What qualifies for short-term disability insurance?

To qualify for benefits from short-term disability insurance, you must experience a covered injury, illness, or medical condition that temporarily prevents you from working. Some policies may require you to prove your inability to work by providing medical documentation signed by your doctor, therapist, or other medical professional.3

Common conditions that may qualify for short-term disability insurance include:3

  • Severe illnesses that impact your ability to work, such as arthritis, cancer, or a heart attack or stroke
  • Accidental injuries that temporarily make it difficult to perform your job duties, such as musculoskeletal issues, head traumas, or broken bones
  • Pregnancy and childbirth, including the time to recover from uncomplicated or complicated pregnancy
  • Surgery and the subsequent rehabilitation after, allowing you time to recover during your post-operative period
  • Mental health conditions that temporarily prevent you from working, such as depression, anxiety, or stress

What doesn’t qualify?

Qualifications will vary by policy, but injuries, illnesses, and other conditions you sustain while at work or because of work are generally not eligible for short-term disability insurance benefits. Work-related conditions are typically covered under workers’ compensation insurance.2 This is a benefit that most states require employers to offer all their employees.3

Keep in mind that many policies and plans have exclusions and limitations and may not fully cover certain disabilities and pre-existing conditions. Foreseeable or intentional injuries, such as suicide attempts, drug abuse, or injuries inflicted during a crime may not be covered.

Do I need short-term disability insurance?

Sudden disabilities that render you temporarily unable to work can happen. Short-term disability insurance may be a proactive way to ensure you and your loved ones are financially taken care of while you focus on recovery.

To help you determine if short-term disability insurance is worth it, ask yourself the following questions:

Do I have sufficient savings, or an emergency fund, to cover living expenses and medical costs if I were temporarily unable to work?

  • Do I have dependents who are financially reliant on my income?
  • Do I have a higher likelihood of experiencing a short-term disability due to my health, occupation, or other factors?
  • Do I qualify for any federal, state, or local-mandated disability or paid medical leave benefits or assistance programs?

Ultimately, whether or not short-term disability insurance benefits are right for you will depend on your individual circumstances and financial situation.

Short-term disability insurance FAQs

How long does short-term disability last?

How long your short-term disability benefits last will depend on your provider, but benefits typically end after six months or until you return to work full time and are able to perform all of the duties of your occupation.3

Can you get partial disability and still work?

Yes, partial disability benefits provide financial assistance to individuals who experience a partial disability. In such cases, individuals can continue working, but with limitations. They usually work part-time while still receiving disability benefits. These payments serve to compensate for the income they’ve lost because they can’t work full-time hours.4

What is an elimination period for short-term disability insurance?

An elimination period for disability insurance is the amount of time after becoming disabled before your benefits start. During this time period you will not receive benefits, but may participate in a company program for salary continuation, use paid time off, or apply for state benefits. For STD benefits, the elimination period is normally around one week to 30 days — or 14 days on average.3

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1Family Matters fact sheet ,” Council for Disability Awareness, 2021. Accessed Jan 30, 2024

2Short Term Disability and Its Benefits,” Patient Advocate Foundation. Accessed Jan 30, 2024

3Short-Term vs. Long-Term Disability: What’s the Difference?” U.S. Chamber of Commerce, 2022. Accessed Jan 30, 2024

4What are the types of disability insurance?” Insurance Information Institute. Accessed Jan 30, 2024

Nothing in these materials is intended to be advice for a particular situation or individual. These materials are for general information purposes only.