If you suffer a significant illness or an injury, you might be unable to work for several months. If you don't have enough sick pay or savings to get you through this type of situation, you might consider purchasing short-term disability insurance, which is a policy that pays a percentage of your salary if you're injured and unable to work for a short period of time.
Short-term disability insurance is generally provided by employers; individual policies are available only on a limited basis. If your employer offers this type of insurance, your working status typically will determine your eligibility, because most employers require that you work full-time to qualify. Some employers also require that you use all your sick days before receiving short-term disability benefits.
Different types of illnesses or injuries can lead to a short-term disability claim. Some of the more common reasons for filing include pregnancy, injuries and digestive and intestinal diseases. The injury or illness must prevent you from performing the duties of your job and cannot be related to your work. A worker's compensation insurance claim must be filed for injuries sustained on the job.
The insurance policy establishes the amount of benefits you will receive. Weekly payments are typically 50 percent, 60 percent or 66 2/3 percent of your regular salary, depending on the policy. Most insurance providers limit the amount of benefits a claimant can receive each month.
You can begin receiving benefits one to 14 days after you have been injured or become ill, with a typical waiting period of seven days. The timing generally depends on the injury or illness. For instance, it might take longer to have benefits approved for an illness, because you must prove that the illness is disabling, while an injury-related claim can be processed and approved immediately. The length of time that you receive benefits ranges from 13 weeks to 52 weeks, depending on the terms established by the policy.
Some common misconceptions regarding short-term disability insurance are that an employer is required to provide short-term disability insurance for his employees, an employee does not pay a premium for the insurance and that employees are automatically qualified for short-term disability. In fact, some employees must pay all or part of the premium if they want this type of policy, and employers can require that an employee work for the company for a specific amount of time before becoming eligible for the policy.