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5 Times Short-Term Disability Insurance Makes Sense

Image: By Marcus Aurelius

Short-term disability insurance provides coverage for individuals who have an illness or disability that prevents them from working. The cause of this disability can even be intentional or scheduled ahead of time, like a pre-planned elective surgery or pregnancy. While you may wonder why anyone would need this type of coverage if there is already workers’ compensation insurance and Social Security Disability Insurance, keep the following things in mind: workers’ compensation is only for work-related injuries, and SSDI is extremely hard to get, with 63% of claims denied.

By contrast, short disability will cover you from 6 to 52 weeks (sometimes as much as 24 months) without the hassle of having to deal with the slow pace of government benefits. The policies are generally offered by private companies, such as Guardian short-term disability. And it covers an extensive number of potential complications that can occur outside of work. Here are 5 times when short-term disability insurance makes sense.

1. Short-term disability can protect the self-employed

If you are self-employed, short-term disability insurance makes sense. Of course, there are many perks to being self-employed: setting your own schedule, working where you’d like, and setting your own salary. But then there are also some drawbacks: no employer-matching 401(k) contributions, no paid vacations…and no short-term disability insurance. This concern is especially important if your business is a sole proprietorship and you do everything alone—the work, the marketing, and the back-end business concerns.

2. Short-term disability can help you avoid touching your savings

Some pundits suggest that the average American household has $10,000 set aside in savings. As it turns out, for many working Americans, this is a generous estimate. And even for those households that do have that much set aside, it may not be enough to provide gap coverage. There may be some time between an injury and when long-term disability insurance kicks in, even a few months. Short-term disability insurance can bridge that gap with some coverage.

3. Short-term disability can help you if you are the sole or primary breadwinner

Many homes have two income earners, but even in these cases, it’s likely that someone is the primary breadwinner. In a situation like this, a short-term disability can wreak havoc with family finances. Moreover, an increasing number of sole or primary breadwinners are mothers. This is especially important as it relates to short-term disability insurance because it just so happens to cover maternity leave. Employers in the U.S. are required to provide unpaid maternity leave; disability insurance can help employed mothers take that time off.

4. Your employer does not offer short-term disability coverage

In most states, employers are required to pay for workers’ compensation insurance. But this only covers injuries that have to do with work. What if you get injured outside of work, but have to miss work because of it? That’s where short-term disability coverage would come into play. Some employers do offer short-term disability for employees who want to purchase it. But they are only required to offer it in a few states like California, Hawaii, New Jersey, and New York.

5. Your demographic information suggests the value of short-term disability

As one age, they become more prone to injuries. But this doesn’t necessarily mean that someone needs to be nearing retirement before they become injury prone. And it’s also important to note that many injuries take place outside of the workplace. For instance, some medical studies have shown that the median average age for injured victims was 30, and the most common type of injury was motor vehicle accidents. If a young or middle-aged adult has a motor vehicle accident—and they’re not conducting work-related deliveries—workers’ compensation won’t cover them…but short-term disability will (and no commuting does not count towards workers’ compensation).

Wrap-up: Short-term disability insurance is a safe bet for everyone

People are always looking for ways to make more money, save money, or pay off their debt while rebuilding their credit. Sometimes the best way to save money is to have an insurance policy in place. You know this is true for your home and your car. It should be a no-brainer for your own body. Unfortunately, the insurance provided by your workplace doesn’t cover anything that happens on your own time. That’s where short-term disability insurance coverage comes in…especially if any of the above 5 reasons relate to you.

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