Long Term Care Planning

Short Term Disability Insurance – How It Works?

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— Last Updated May 27, 2022

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Reviewed by
Eric Berkman

Guide Short Term Disability Insurance – How It Works?

— Last Updated May 27, 2022

Stephanie Wilson

Director of Operations


Reviewed by

Eric Berkman

A general outlook on short term disability insurance

Short-term disability insurance is a policy that provides workers with a specific percentage of their income for the time they are unable to work due to an illness, or an injury. Given the fact that the benefit period is short-term, this type of disability insurance only typically covers the insured for around 3 to 6 months.

Short-term disability insurance can be used by people with specific conditions, ailments, or injuries that are considered to be short-term disabilities; such as pregnancy or persistent pain, or anything else that prevents you from being able to perform your job.  Short-term disability insurance coverage has multiple advantages, as it can safeguard your income and savings against medical expenses, pay for your monthly bills, and protect the majority of your income while you are unable to work. 


Short-term disability insurance is important to have especially if you have people who are depending on your income to help provide for the roof over their heads and food in their mouths. It is also a good benefit that employers can offer their employees as a way to help recruit them to work at their company and to help give them peace of mind so that if they become ill or injured and unable to work, they would have some form of income coming in, in the form of the benefits of insurance from the short-term disability insurance policy.

What is short-term disability insurance?

Short-term disability insurance is a type of insurance policy that you can make use of in cases where you might be unable to perform your job due to a short-term disability. This type of insurance will cover you for a specific period and has many advantages attached to it as well so remember that when applying for disability insurance.


Short-term disability is a type of insurance policy that is meant to cover workers after they undergo an injury, illness, or disability due to which they are unable to work. Typically, a short-term disability insurance policy will cover workers for around 3 to 6 months, however, this period may vary under different insurance companies and policies.


The way a short-term disability insurance policy works can be illustrated with the help of the following example.  If a person made $50,000 per year prior to being disabled and their disability prohibits them from working, their disability insurance would reimburse them for a percentage of their lost income if they met the eligibility requirements. In this way, short-term disability insurance basically compensates the now-disabled worker’s lost paycheck. 

What it covers

Just like the name suggests, a short-term disability insurance program covers ailments and illnesses that occur for a relatively short period (typically ranging from about 3 to 6 months). These illnesses and ailments are usually physical, and can include chronic pain. However, many short-term disability insurance plans also cover individuals undergoing mental health issues, which might make it difficult for them to be able to work. 

In such cases, necessary documents and proof needs to be provided that you have mental health issues that are preventing you from working. Certain insurance companies have different policies regarding covering mental health issues under short-term disability insurance plans; some might not cover for it if the issues aren’t directly related to the type of job that you have, or if the issues were pre-existing.  This is an especially important topic to discuss with your insurance agent.  At Policy Solver we can help you figure out which insurance carrier is the best one to get a short-term disability policy from, especially if mental health issues are a concern for you.


An individual can get short-term disability insurance through their employer, but their is a waiting period for a disability insurance policy. Such insurance policies are generally offered by companies to their employers and are included in their benefits package for a very minute cost if any at all. However, it is also possible for you to get short-term disability insurance on your own via insurance companies that offer it. This can be slightly risky, as it requires in-depth research to figure out whether the company offers policies suitable for you, and whether they charge high premiums for it or not.


There are quite a few benefits that come along with short-term disability insurance. First and foremost is the financial assistance and security that you gain, when you are unable to work because of an illness or ailment. Such benefits are helpful for you as an employee in such a way that they are more focused on a speedy recovery, rather than worrying about how to pay off your bills and expenses. One of the most valuable assets that you gain from short-term disability insurance is income, as well as regaining the ability to work.

Who is short-term disability for?

Short-term disability insurance, to put it simply, can be used by anyone with a short-term illness or injury. However, there are a few specific requirements that need to be met for you to attain the benefits from a short-term disability insurance program.

Who is eligible

To be eligible for short-term disability insurance, a healthcare provider or a medical expert must determine that an employee is unable to complete the duties required in their employment due to a disability. Employees who are pregnant, recovering from surgery, or suffering from chronic pain may be eligible for short-term disability insurance.

Employees will not be compensated through short-term disability insurance for injuries occurring as a result of workplace tasks or injuries caused on the job. In such instances, most businesses are compelled by state laws and company rules to offer workers’ compensation to their employees. When it comes to short-term disability insurance, pre-existing conditions, such as previously documented mental health issues, may also be excluded.

A few conditions that can be classified as short-term disability are:

  • Pregnancy
  • Post-surgery recovery
  • Non-work related injury
  • Back disorders
  • Short-term illness
  • Joint disorders

Different policies

As previously stated, an employee will not be reimbursed for a specific amount of income under the short-term disability insurance policy. Instead, they will be given a certain percentage of their salary for a fixed period (usually less than a year).

There is normally a 7-day waiting period for short-term disability plans, during which employees are instructed on how to make the greatest use of these benefits and are strongly urged against misusing them. Typically, the short-term disability program provides 60-70 percent of an employee’s pay. Various other incentives, like health benefits or sick leave, may be added to this percentage of income depending on the firm, as long as the total amount of benefits granted to the employee does not exceed their entire income for the month.

New York, California, Rhode Island, New Jersey, and Hawaii are among the states where employers are required to provide short-term disability insurance to their employees. Employers in the remaining states may choose to offer short-term disability policies to their employees.


A short-term disability plan will usually include the following features:

The amount of benefit received: This is the amount received, which will not be your entire income, but rather a percentage of it (about 50-80%).  Some short-term disability plans may include additional benefits, with the number of benefits initially being higher (e.g. 80% in the first three months) and then gradually decreasing in the months following (e.g. 70 percent in the remaining months).

Premium: The amount you pay every month to your insurance provider on a monthly basis is known as the premium amount. Depending on the laws of the firm you work for or the state you reside in, your employer may be able to pay off this sum.

Elimination period: The elimination period is the amount of time a person must wait before getting benefits from their short-term Disability program. It normally lasts 7-14 days.

Benefit period: This is the time frame in which you will receive benefits. A benefit period for short-term Disability Insurance is typically 3-6 months, but not more than a year.

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How does short-term disability work?

Many companies provide short-term disability insurance to their employees as part of a group plan. The majority of employers pay for all of their employees’ expenses. In fact, in a few places, some companies are required by law to provide this insurance coverage.

You can purchase an individual short-term disability policy if you are unable to obtain short-term disability coverage through your employer or another group. It is possible to contact an insurance agent or an insurance provider directly if you need this form of coverage.

Group insurance plans are a guaranteed issue, which means you won’t have to go through the underwriting process. Short-term disability policies that are sold on an individual basis are sometimes guaranteed to be issued. 

On the other hand, most short-term insurance policies sold directly to consumers will require applicants to answer a few health-related questions. These questions are meant to determine whether you are currently being treated for any pre-existing conditions or have previously been treated for such conditions. You may be denied coverage or have your benefits reduced if this is the case.

How to get short-term disability insurance?

Most individuals get intimidated when applying for short-term disability insurance, but the process is as easy as ABC and can be completed in just three steps.

The Claim Form

The Claim Form will basically allow you to file for the need for short-term disability benefits. This form can be either available online, or you can ask the HR department in your company for a copy of it. Fill in the form thoroughly will all of the details required; details will typically include when you stopped working, the nature of your injury/health condition, personal as well as phone details. If your employer is covering for your insurance policy, then make sure that they fill in their part on the Claim Form as well. Employers will generally be required to answer questions about the type of job that you have, your tasks, salary, and so on.

Physician validation

Once you have completed filling out the form, you will be required to go to a doctor. Your doctor will carry out a physician validation, wherein they will sign the form and confirm the condition that you are in.

Submit the form

Once the physician validation is done and you have completed filling out your form, you can submit it following the instructions that were provided to you. Make sure that you have a copy of the form, and try to find out when you can expect to hear back, or when you might receive your first benefits cheque if your claim does get approved.

Where can I find out more and get advice on short-term disability insurance?

It’s always recommended to go to the very best consultant for advice on sensitive matters such as disability insurance policies. And that’s where Policy solver comes in.

Policy solver’s services

Today, you can find multiple disability insurance consultants on the internet. However, choosing the right advisor is another difficult task.

Policy solver has knowledgeable, licensed agents, and is here to help you navigate through your disability insurance journey. We are a team of professional insurance policy brokers and we can save you time and money while finding the right policy for your specific needs.

Our experienced advisors will ask you a few questions to understand your unique situation and will come up with a comprehensive analysis of different insurance plans so they will be able to recommend the best policy at the best price for you.

So, what are you looking for? Call us or fill out a contact form, and we will get back to you soon!

Employers Resource. (2016, July 12). Why short-term disability is important – STD benefits. Employers Resource. Retrieved October 22, 2021, from https://employersresource.com/employee-benefits/why-short-term-disability-is-important-std-benefits/#:~:text=Short%20term%20disability%20benefits%20are,and%20receiving%20their%20regular%20income.&text=Not%20only%20will%20employees%20receive,of%20their%20paid%20time%20off.

The importance of short and long-term disability insurance. MWE Partnership. (2019, May 29). Retrieved October 22, 2021, from https://www.mwepartnership.com/importance-short-long-term-disability-insurance-2/.

What’s the difference between long term and short term disability insurance? Guardian. (n.d.). Retrieved October 22, 2021, from https://www.guardianlife.com/disability-insurance/long-term-vs-short-term.

Fernando, J. (2021, September 8). Disability insurance. Investopedia. Retrieved October 22, 2021, from https://www.investopedia.com/terms/d/disability-insurance.asp.

Brannen, D., Brannen, D., About David BrannenA former occupational therapist turned disability lawyer, Brannen, A. D., & A former occupational therapist turned disability lawyer. (2021, June 11). Short-term disability: Ultimate Guide (2021). Resolute Legal Disability Lawyers. Retrieved October 22, 2021, from https://www.resolutelegal.ca/short-term-disability-benefits/.

Boogaard, K. (2020, June 19). Short-term disability: What every employee should know. The Muse. Retrieved October 22, 2021, from https://www.themuse.com/advice/what-to-know-about-short-term-disability.

Lisa Guerin, J. D. (2021, September 8). Preparing your short-term disability claim. www.disabilitysecrets.com. Retrieved October 22, 2021, from https://www.disabilitysecrets.com/resources/disability/short-term-disability-laws/preparing-your-short-term-disability-claim.

Shrm. (2020, February 28). Managing disability benefits. SHRM. Retrieved October 22, 2021, from https://www.shrm.org/resourcesandtools/tools-and-samples/toolkits/pages/managing-disability-benefits.aspx.
Wolstenholm, J. (2019, July 15). Short term disability insurance: How it works in 2021. Breeze. Retrieved October 22, 2021, from https://www.meetbreeze.com/disability-insurance/short-term-disability-insurance/.

Stephanie Wilson


November 3, 2021

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