Is Short-Term Disability Worth it?

Short-term disability can be a valuable asset to have in the event of unexpected illness or injury, but is it worth investing in? It’s important to weigh the costs and benefits of short-term disability to determine if it’s right for you.

Short-term disability insurance provides financial protection if you’re unable to work due to a disability caused by an illness or injury. When you’re forced out of work due to an unforeseen circumstance, short-term disability can provide much needed regular income while you focus on getting the help you need.

This article will cover the basics of short-term disability, from what is covered and how much it costs, to who should consider investing in a policy. We’ll also discuss ways to make sure you get the most out of your policy and some potential drawbacks. By understanding all the pros and cons, you’ll be able to make an informed decision about whether or not short-term disability is right for you.

  1. What Is Short-Term Disability?
  2. Who Is Eligible for Short-Term Disability?
  3. What Types of Benefits Does Short-Term Disability Cover?
  4. Do I Need to Pay Premiums for Short-Term Disability?
  5. Are There Alternatives to Short-Term Disability?
    1. Savings
    2. Loans or Credit Cards
    3. Relatives or Friends
  6. How Do I Apply for Short-Term Disability?
  7. Conclusion

What Is Short-Term Disability?

Short-term disability is a type of insurance plan that helps you cover some of your wages if you can’t work due to an illness or injury. Depending on the plan, it may pay for up to 6 months of missed wages.

This type of insurance is beneficial for a number of reasons. For starters, it can help you meet your daily living expenses if you are unable to work. This can be especially helpful if you need help with medical bills, or other costs associated with an illness or injury.

Second, short-term disability can give you some financial security while you recover—and potentially prevent long-term financial problems caused by the absence of income. It’s also important to note that short-term disability plans are usually owned by the individual policy holder, and not tied to their employers—so it follows them even if they leave their job.

Overall, short-term disability offers peace of mind knowing that in case something happens, you will have at least some form of income coming in. This can be incredibly helpful in both the short and long term – giving you time to rest and focus on your recovery without worrying about being able to make ends meet at the same time.

Who Is Eligible for Short-Term Disability?

Are you considering signing up for short-term disability? Before you take the plunge and make the commitment, it’s important to know who is eligible and what type of coverage is available.

The first factor to consider is employment status. To qualify for short-term disability, you must be a salaried employee at a company that offers this kind of insurance. Typically, only employers with 50 or more employees offer short-term disability coverage. However, it never hurts to ask your HR department if they provide this type of benefit.

In addition, the policy must be in place before you become disabled due to illness or injury. So if you are already out of work with an injury or illness, your employer may not be required to provide you with coverage.

Finally, some policies contain certain limitations on what conditions qualify as disabling—check your policy or consult your HR team for more information on this topic. These limitations are based on severity—for example, minor injuries or illnesses that do not prevent an employee from continuing their duties are generally not covered by a short-term disability policy.

What Types of Benefits Does Short-Term Disability Cover?

When it comes to receiving benefits from short-term disability, there are several key factors that you should be aware of. Depending on the plan and type of coverage you choose, the following types of benefits may be available to you:

  • Loss of wages: If you experience a disability and are unable to work, short-term disability plans may provide compensation for up to a certain percentage of your regular wages. This amount can help cover basic necessities such as housing, food, medical expenses, and more.
  • Job protection: Short-term disability plans can help protect your job so that you don’t have to worry about being fired while on disability leave.
  • Medical coverage: Many short-term disability plans offer some form of medical coverage, which can include doctor visits, hospital stays, prescription drugs, and more.
  • Rehabilitation costs: If your disability requires rehabilitation services or specialized equipment, many short-term disability plans may cover all or part of these costs.

Depending on the plan and provider, other types of benefits may also be available. It’s important that you research all of your options carefully in order to make the best decision for your situation.

Do I Need to Pay Premiums for Short-Term Disability?

When it comes to short-term disability coverage, the answer is yes. The premiums for short-term disability are usually paid for by employees out of their own pocket. However, you may also have the option of paying them through payroll deductions. Depending on your insurance policy and the level of coverage you choose, the cost of these premiums can vary.

Premiums for short-term disability policies typically range from 0.5% to 2% of your salary, with higher benefits carrying a higher premium cost. It’s important to note that some employers may also offer additional voluntary benefits such as accidental death or dismemberment coverage, which could increase the cost further.

Your employer may also offer other ways to offset the cost of premiums, such as using pre-tax dollars or offering matching contributions. It’s important to talk with your employer to understand what options are available and how they can help you get the coverage you need at an affordable rate.

Are There Alternatives to Short-Term Disability?

When considering whether or not Short-Term Disability (STD) coverage is worth the cost, it’s important to consider what alternatives you have. Here are a few of the most popular:


Depending on your savings and assets, you may be able to cover your costs without the need for any additional coverage. Consider creating an emergency fund for just such a purpose.

Loans or Credit Cards

Loans and credit cards are other options to consider if you need money quickly, though they often involve high interest rates. If taking out a loan, make sure you can comfortably pay it back within a reasonable amount of time.

Relatives or Friends

Asking friends and family members for help may be one of your best options. Make sure to be thoughtful in your approach – let them know that you are aware of their situation and that you will keep them updated throughout the process and make sure that any arrangements remain informal until both parties have had time to assess their own situations.

Each option has its own pros and cons – ultimately, it is up to an individual to decide which strategy is best. When evaluating each option, ask yourself if there is enough money available without putting yourself in serious financial trouble down the road. Do you want someone else involved in your decision-making process? How comfortable are you with borrowing money?

How Do I Apply for Short-Term Disability?

If you are ready to apply for short-term disability coverage, the first step is to contact an insurance provider. Depending on the type of plan you are looking for, there may be different requirements that need to be met in order to qualify.

In general, you will need to provide information about your health, occupation, and other factors that can affect your eligibility for coverage. Your insurance provider may also request evidence of your income and any existing medical conditions before approving a policy.

Once you have submitted your application, it typically takes between 4-6 weeks for the process to be complete. During this time, an underwriter will review your application and determine if you meet the criteria needed for coverage. If approved, your policy will usually go into effect within 30 days.

At this point, it is important to familiarize yourself with the details of your new policy so that you know exactly what is covered in the event that you need to file a claim or make a change to your policy later on.


Ultimately, whether or not a short-term disability is worth it depends on the individual and their specific situation. It is important to realize that this insurance can provide you with the protection and financial security you need when something unexpected happens and you are left unable to work. It is important to do research and consider the various plans and options available to find the best fit. Short-term disability insurance can be an invaluable safety net and provide you with peace of mind knowing that you and your family are covered should the unexpected happen.


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