Lowering Out-O-Pocket Healthcare Costs

What is Short- and Long-term Disability Insurance?

A medical condition that reduces an employee’s ability to perform their work duties, usually due to an illness or injury, is considered a disability. Statistically, one in three employees will miss more than one month of pay as a result of an injury or illness. Without disability coverage, employees stand to lose a considerable amount of money. Bills can accumulate due to the disability, making treatment more difficult to afford with the elimination of their income source.

Short-term disability (STD) and long-term disability (LTD) insurance are beneficial as they compensate a portion of an employee’s salary during this period, providing more financial security in comparison to those who do not have either type of disability insurance.

Short-term Disability Insurance

STD coverage typically begins one to 15 days after the disability-causing event. Through STD coverage, the employee will receive funds via a fixed percentage of their income or a set weekly amount.

While policies may vary, STD generally lasts for approximately 10 to 26 weeks. After this coverage period ends, long-term disability (LTD) coverage may take effect for eligible employees.

Long-term Disability Coverage

LTD covers a set percentage of an employee’s regular income but only after a specified waiting period. The waiting period is typically the length of STD coverage or 3 to 6 months. LTD is designed to protect workers who, prior to retirement, become disabled for an extended period of time.

Similar to STD, LTD policies vary. The length of LTD coverage can be anywhere from two to 10 years, but occasionally, some policies pay out until age 65.

Voluntary Benefits

Employers can offer employees STD and LTD insurance as voluntary benefits. Voluntary benefits are attractive for employers looking to keep costs low, as they cost employers nothing. Employees are required to pay the full premium if they desire the additional coverage.


If you have any questions about short- or long-term disability, please contact your dedicated Creative Benefits, Inc. team member.