Arizona Tribune - 5 Myths About Short-Term Disability Insurance

1. Short-term disability insurance covers work-related injuries

Short-term disability insurance generally does not cover any work-related injuries, although some insurers may offer limited short-term disability coverage for these. Worker's compensation typically helps cover the bulk of work-related injuries. This may prompt you to ask, "what does short-term disability cover?" This type of policy helps cover any injury or illness that occurs when not on the job if that injury or illness prevents you from attending work. So, worker's compensation and disability insurance more of a safety net.

2. Short-term disability insurance is expensive

A big concern among potential policyholders is, "how much is short-term disability?" People may want to avoid it and take the risk of being uninsured if the policy is expensive and they don't expect to become injured.

The truth is short-term disability is not necessarily expensive. Private plans may cost 1 to 3% of your salary on average.¹ Employer-sponsored plans may be even cheaper since the employer gets a group discount, and the employer may even help cover some premiums. For many, these premiums are well worth the added peace of mind and the actual coverage should they have a disability for a short time.

3. Short-term disability insurance doesn't cover pregnancy

Many companies, but not all, offer paid maternity leave to employees. Some may offer unpaid maternity leave or no leave at all. Employees in the latter case aren't out of luck, though, because pregnancy, childbirth, and post-partum recovery can possibly qualify for short-term disability benefits.

You can't use both maternity leave and short-term disability benefits if you have both through your employer. For example, if you receive full maternity leave, you probably won't be able to file a claim with your short-term disability policy. However, if you receive partially paid maternity leave, your short-term disability may make up the difference between the maternity leave amount and your salary.

All that said, some private short-term disability plans may let you claim your full short-term disability on top of maternity leave. Check your policy's terms and conditions to be sure.

4. My employer-provided short-term disability policy is enough

Short-term disability insurance offers competitive rates and can be easy to manage since you can handle your policy alongside the rest of your employer benefits. However, it may not be enough. Employers tend to offer limited options to serve a diverse array of employees, and the payout is often a portion of your salary. So, you may be unable to help cover expenses while away from work.

Employer policies may also have certain restrictions, waiting periods, and other terms that complicate the process. Getting a private plan elsewhere to supplement your employer policy may work well. You don't have to get as much coverage since you only need to supplement your employer policy. This helps you get adequate coverage while saving on premiums.

5. You can't receive benefits with a partial disability

Some policies, particularly employer-sponsored policies, may pay you partial disability coverage if you are still able to work in a limited capacity. For example, if you can only work part-time or can't do certain tasks while recovering, your policy may provide partial disability coverage. This may not make up the full gap in income, but it will fill most of that gap to minimize financial strain while recovering.

The bottom line

Oftentimes, a lack of knowledge and contradicting information stops people from getting the insurance coverage they need. That's why we have debunked several short-term disability myths.

Short-term disability does not cover work-related injuries in most cases, but it's an affordable way to protect your income if injured outside of work. You may still be able to claim it if you have a partial disability, and it can even cover pregnancy if you don't have sufficient maternity leave. Now that you understand short-term disability insurance better, you will hopefully feel more confident exploring policies and finding a plan that works right for you.

Source:

¹ Investopedia - How Much Does Short-Term Disability Cost? Updated April 20, 2023. https://www.investopedia.com/how-much-does-short-term-disability-cost-7229223. Accessed September 12, 2024.

Content within this article is provided for general informational purposes and is not provided as tax, legal, health, or financial advice for any person or for any specific situation. Employers, employees, and other individuals should contact their own advisers about their situations. For complete details, including availability and costs of Aflac insurance, please contact your local Aflac agent.  

Short-Term Disability (57600 Series): In Arkansas, Policies A57600AR & A57600LBAR. In Delaware, Policies A57600DE & A57600LB. In Idaho, Policy A57600IDR. In New York, Policy NY57600. In Oklahoma, Policies A57600OK & A57600LBOK. In Oregon, Policies A57600OR & A57600LBOR. In Pennsylvania, Policies A57600PA & A57600LBPA. In Texas, Policies A57600TX & A57600LBTX. In Virginia, Policies A57600VA & A57600LBVA. This is a brief product overview only. Coverage may not be available in all states, including but not limited to PR and RI. Benefits/premium rates may vary based on plan selected. Optional riders may be available at an additional cost. Plans and riders may also contain a waiting period. Refer to the exact plans and riders for benefit details, definitions, limitations and exclusions. For availability and costs, please contact your local Aflac agent/producer.

Coverage is underwritten by American Family Life Assurance Company of Columbus. In New York, coverage is underwritten by American Family Life Assurance Company of New York.

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SOURCE: Aflac

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