4 Factors that Affect Short Term Disability Insurance

Short term disability insurance is your security blanket if you cannot work due to illness or injury. Instead of relying on savings in case of this event, you can plan on your insurance paying a portion of your salary for up to two years. Of course, there is a complicated process to claim these benefits. This process will take into account a variety of factors to determine when and how much you should be paid.

#1 Your Elections

You have to elect short-term disability insurance with your insurance company. Your employer will often offer this election as part of your benefits package, meaning your employer will split the cost of your coverage. You will still have to contribute monthly to the coverage in order to gain benefits in a time of need. You can change your elections during your open enrollment period. You can also change elections as a result of a qualifying event, such as having a child or getting married. 

#2 Your Salary

The basis for your payments is not your contributions. Instead, short-term disability insurance provides you with a portion of your income. This measure is used to determine how much you are actually losing by not working. Instead of your employer continuing to pay your salary while you are unable to work, you will receive a portion of that salary directly from your insurer. This can be up to 75% depending on your coverage. The portion covered may also rely partially on your income bracket. The goal is for the coverage to allow you to continue meeting daily expenses while unable to work.

#3 The Type of Qualifying Event

Depending on whether you are disabled due to injury or illness, your benefits may change. The amount you are awarded will not typically be different. The time when you can make an election, though, will change for a different type of qualifying event. If you are injured, the benefits will typically kick in immediately. For example, if you suffer multiple injuries in a car accident, your insurance will start paying out immediately following the accident. If you become ill, it may take 7 to 14 days for your insurance to start paying. This is because you will typically be permitted to use office sick days or paid time off in the beginning. Only if your illness shows signs of a long-term, debilitating condition will your benefits start paying out.

#4 Where the Event Occurred

If you are injured at work, your worker's compensation coverage will be responsible for covering your claim. This works in your favor, because worker's compensation usually pays out more than short-term disability insurance. The same thing is true if you contract an illness due to your job. For example, some jobs require involvement with hazardous materials. If you are exposed to those materials and fall ill, your worker's compensation coverage will pay your claim instead of your short-term disability coverage. Short-term disability insurance only pays a claim when the injury or illness is caused by factors outside of the workplace environment. 

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