What are the basics of short term disability insurance?

Short term disability insurance comes in handy when you are sick for a period of time, can’t go to work, and don’t have enough money in your savings account to support you while you are out of work. According to the American Council of Life Insurers, serious disability will face one-third of all Americans between the ages of 35 and 60. That statistic should urge you to purchase short term disability insurance. Basically, short term disability (STD) will pay a portion of your salary while you are disabled to go to work for a certain period of time due to illness or injury. These injuries do not include on-the-job injuries. Injuries that were caused on the job can be covered only with workers compensation insurance.

According to a survey by John Hewitt & Associates, a disability research company based in Portland, Maine, the average premium in 199 for a group STD policy was $144. Either the employer or the employee can purchase the STD insurance. Keep in mind that you won’t have to take a medical exam for STD insurability, because STD policies are "guaranteed issues". From one to fourteen days after becoming disabled, you will start to receive money from your STD insurance policy. Depending on whether you suffer an illness or injury, the actual time for coverage to kick in will vary. Your benefits will kick in immediately, if, for example, you fall off a ladder at your house. Before you begin receiving payments from your STD policy, your employer might require for you to use all of your sick days. Restrictions like these might come from your employer practically all the time. Individual STD policies might be available on a limited basis. "Accident policies" will be available by some insurers. These policies will pay you money on a monthly basis for one year, if you are injured in an accident. According to Drew King, vice president of marketing for JHA, most people do not opt for that coverage.

Disability insurance is a convenient way to be ready for whatever the road throws at you. You never really can be too sure of how ill you are going to become or how bad things will get. For people who do not have a savings account, and especially people who have dangerous jobs (carpenter, driver), this will come in handy. King says, "You can buy individual STD policies, but they are very hard to find and they’re very expensive. Most people think they can get through six months to a year with their savings, or some kind of salary continuation, or help their parents."