Do You Need Short-Term Disability Insurance?
Insurance can really come in handy when you’re faced with unplanned events. Auto insurance helps pay for expensive repairs when you’re in an accident. Homeowner’s insurance protects your largest investment, your house. And, when the absolute worst thing happens, life insurance helps ease financial burdens your loved ones might have to face. Do you know, however, what you’d do if you couldn’t work?
Disability insurance is the answer to your problems if an illness or injury causes you to leave work. You should know, though, that there are typically two types of disability insurance: long-term and short-term. If you are faced with a debilitating illness that causes you to miss work for months, long-term disability insurance can help you avoid worries about mortgage and monthly debt payments. Instead you will be able to focus on healing and getting back to normal. There is no doubt that long-term disability is a requirement for a well-developed financial plan.
Short-term disability insurance, on the other hand, is an entirely different animal. Short-term disability usually comes into play when you’re unable to work for a shorter length of time. To claim short-term disability benefits, most insurance companies require that you be out of work for more than two weeks, but less than two months. After two months of missed work, you are usually able to file a long-term disability claim.
When deciding if you need short-term disability insurance there are a couple of considerations. First, you should determine if your employer offers this coverage to its employees. If the coverage is free and available, then, by all means, sign up for it. You’ll be glad to have the coverage if you ever need it and you won’t be footing the bill.
If your employer doesn’t pay for this type of insurance coverage, you need to consider your health to decide if you need short-term disability insurance. No, I don’t mean your medical health; I mean your financial health. If your emergency fund is virtually non-existent, being out of work for a few weeks could wreak havoc on your financial situation. On the other hand, if you’re one of those people who keep three months worth of expenses in the bank for a rainy day, being off for three of four weeks may not be the end of the world for you.
Take a look at your financial personality before you decide whether or not you need short-term disability insurance. If you have the willpower to be diligent about saving, you may prefer to put the money that you would have spent on premiums into a savings account. You’ll enjoy much more flexibility in accessing your money than you will have in claiming your insurance benefits, but still have something to get you through a disruption in work.
Filed under: Personal Finance
[...] Yes Home Finance wrote an interesting post today onHere’s a quick excerpt Insurance can really come in handy when you’re faced with unplanned events. Auto insurance helps pay for expensive repairs when you’re in an accident. Homeowner’s insurance protects your largest investment, your house. And, when the absolute worst thing happens, life insurance helps ease financial burdens your loved ones might have to face. Do you know, however, what you’d do if you couldn’t work? Disability insurance is the answer to your problems if an illness or injury causes you to leave w [...]
As a small business owner, I’ve always carried life insurance. After a friend was out of work for 5 months due to pancreatitis, I looked into disability insurance at Insure Your Future (http://www.disabilityinsuranceadvisor.com/). I had an agent call me. She took me through the options and provided quotes from several different companies. I’m now covered up to 70% of my salary if I can’t work.
[...] Do You Need Short-Term Disability Insurance? By D.J. If your employer doesn’t pay for this type of insurance coverage, you need to consider your health to decide if you need short-term disability insurance. No, I don’t mean your medical health; I mean your financial health. … The Family Wallet - http://thefamilywallet.com [...]
[...] Family Wallet wonders Do You Need Short-Term Disability Insurance? Find out if this type of insurance is something you should [...]
[...] The Family Wallet wonders Do You Need Short-Term Disability Insurance? [...]
[...] WebMaster wrote an interesting post today onHere’s a quick excerptDisability insurance is the answer to your problems if an illness or injury causes you to leave work. You should know, though, that there are typically two types of disability insurance: long-term and short-term. … [...]
Are you kidding me this shouldn’t even be a question! The question should be “how much STD do you need?”
Good Lord all it would take is 6 weeks of uncovered disability + another unexpected financial event and whoops! you’re in debt.
The types of insurance every family needs is: life for both spouses, health, STD and LTD, property and casualty, and liability.
Too many people overlook how much they’d have to lose if something unexpected happen and they weren’t covered for it.