Disability Insurance

Short Term Disability

Most employers offer short-term disability coverage, but this is the perfect time to check if you are covered.

• Short-term disability policies cover 3 – 6 months of disability and usually come into paly with injuries and pregnancies.
• Salary coverage is usually 70-80% of base salary
• Understand the elimination period, which is the period of time that needs to go by before disability payments are issued (30,60,90 days).

Long Term Disability

If the employer offers this benefit, you will more than likely need to ensure you enroll in it.

• Kicks in once short-term disability ends.
• Salary coverage is usually anywhere from 40-70% of base salary (obviously the higher percentage you could receive the better off you will be if you have to be on long-term disability).
• Elimination periods tend to be much longer (90-180 days).
• Tends to be much more affordable to purchase through employer than independently.

Pre-Tax vs. After-Tax Premiums

Keeping in mind that if you pay premiums with pre-tax dollars, the benefit paid out will be taxed and vice versa. Depending on your personal situation, you may want to receive the higher benefit during your disability and therefore pay the premiums with after-tax dollars.