Short Term Disability

Most of us are comfortable dealing with car insurance, medical insurance and home insurance payments – these things feel natural and necessary. However, a surprising number of people don’t think to insure what is perhaps their most valuable asset: their ability to work. With three out of ten people entering the workforce today estimated to become disabled in some way before retiring, it is important for employees and their employers to consider making short term disability insurance an essential part of their financial planning.

Short term disability insurance will pay a percentage of the salary of a disabled employee, usually between 40 and 65 percent, over a short period of time. Benefits require a waiting period of zero to 14 days, depending on the nature of the disability, specifically whether it was caused by an illness or an injury. If your employee was disabled as a result of an injury, benefits may be received right away. Once the waiting period has passed, however, short term disability insurance generally remains in effect between three and six months. In exceptional cases, benefits may be provided for up to two years. In addition to time limits, most short term disability insurance plans include a cap; a maximum amount of benefits that can be obtained within one month.

Short term disability insurance is guarantee issue, which means that your employees do not need to take a medical exam in order for your company to purchase coverage. The definition of disability varies depending on the carrier. Some plans define a disability as an employee being unable to perform in their own occupation, whereas other plans limit disability benefits to those unable to perform in any occupation suited to their training and experience.

In California, as well as in four other states, employers are required by law to provide some form of disability insurance. When looking for the right short term disability plan, small businesses will need to take into special consideration the possibility of the owner becoming disabled. At William J. King & Associates, we are committed to finding your organization the short term disability plan that is best for you.

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