Facts About Disability

• The odds of people suffering short term disabilities are higher than other incidents. Three in 10 workers will become disabled at some point during their working years, according to the Social Security Administration. One in eight employees suffers a disability, which is more common than a person involved in a serious auto accident (one in 70) or home fires (one in 88), according to Insurance.com.
  
  

Features

• Short-term disability plans range in coverage lengths from a couple weeks up to two years. Waiting periods can last for several weeks before insureds receive policy benefit payments. However, waiting periods can be waived if the injury or illness is evident, such as a broken leg. Insureds can also receive retroactive payments to cover illnesses or injuries that progressively get worse. Insurance benefits can be backdated to the date the disability started.
  
  

Considerations

• If workers purchase short-term disability insurance privately, they may have to provide evidence of insurability. This isn't a requirement if they are applying for coverage through their employer-sponsored plans because they are considered "guaranteed issue" policies. Benefit payments from short-term disability policies can be taxable by the Internal Revenue Service, depending on how the premiums are paid. People will receive taxed benefits if their employers are paying the insurance premiums. Policy benefits will be distributed tax-free to the insureds if their insurance premiums are paid with after-tax dollars.
  
  

Types of Disabilities

• Short-term disabilities are injuries and illnesses that keep insureds out of work for temporarily. For example, injuries such as broken bones and illnesses such as the flu or pneumonia are considered short-term disabilities. Some of the top causes of short-term disability claims are cancer, diabetes, heart disease and arthritis, according to the Council for Disability Awareness.
  
  

Warning

• Short-term disability policies do not cover 100 percent of the insureds' earnings. According to Life and Health Insurance Foundation for Education, short-term disability policy benefits cover 40 to 65 percent of insureds' salaries. Disability policies from MetLife cover more of the insureds' earnings, typically 60 to 70 percent. Not replacing the insureds total income is done to provide an incentive to return to work.