Replacing Income if You Can't Work

Short-term disability insurance replaces a portion of your income if you have a temporary disability, such as an illness, injury, or pregnancy, that prevents you from working.

The Basics

Short-term disability generally replaces 40 to 70 percent of your monthly income until you can return to work or your benefit period ends, typically three to six months. Coverage applies only to injuries or illnesses that are not work-related.

There are two types of short-term disability policies. One pays if you’re unable to perform the duties of your own occupation, while the other covers you if you cannot work at any job.

Pregnancy Coverage

Sometimes, disability coverage starts two weeks before a woman’s due date and continues for six weeks after the birth. The beginning date of coverage can be amended with updated medical information. The Family and Medical Leave Act (FMLA) provides 12 weeks of unpaid leave after short-term disability ends.

Buying a Policy

The cost of a short-term disability policy depends on your age, gender, occupation, and overall health. Before purchasing a policy, look for the insurer’s definition of disability, the length of the waiting and benefit periods, and the coverage amount. Your insurance professional can help.