Short-Term vs Long-Term Disability Insurance: Complete Guide

Disability insurance protects your income if you can’t work due to illness or injury. Understanding the difference between short-term and long-term coverage helps you build proper protection.

Quick Comparison

What Is Short-Term Disability Insurance?

Short-term disability (STD) provides income replacement for temporary disabilities that prevent you from working for a limited period.

Key Features

• Waiting Period: 0-14 days before benefits start
• Benefit Period: Typically 3-6 months (some up to 1 year)
• Benefit Amount: Usually 60-70% of base salary
• Common Causes: Surgery recovery, pregnancy, injuries, short illnesses

What Short-Term Disability Covers

• Recovery from surgery
• Pregnancy and childbirth
• Temporary injuries (broken bones, sprains)
• Short-term illnesses
• Mental health conditions requiring time off

Limitations

• Coverage ends after benefit period (usually 6 months)
• May not cover all conditions
• Pre-existing condition exclusions
• Often tied to employer (lose it if you leave)

What Is Long-Term Disability Insurance?

Long-term disability (LTD) provides income replacement for extended disabilities that prevent you from working for months, years, or permanently.

Key Features

• Waiting Period: 30-180 days (elimination period)
• Benefit Period: 2 years, 5 years, to age 65, or lifetime
• Benefit Amount: Usually 50-70% of income
• Common Causes: Cancer, heart disease, chronic conditions, serious injuries

What Long-Term Disability Covers

• Cancer treatment and recovery
• Heart disease and stroke
• Chronic back problems
• Neurological conditions
• Serious mental health conditions
• Injuries requiring extended recovery

Policy Definitions

Own Occupation: You’re disabled if you can’t perform YOUR specific job. More favorable.

Any Occupation: You’re disabled only if you can’t perform ANY job suited to your education and experience. More restrictive.

Transition policies: Own occupation for first 2 years, then any occupation.

Cost Comparison

Short-Term Disability Costs

Long-Term Disability Costs

Example: A $60,000/year salary might cost:

• Short-term: $30-40/month
• Long-term: $50-150/month

How They Work Together

Short-term and long-term disability complement each other:

1Day 1-14:    [Waiting Period - Use sick leave/savings]
2Day 15-180:  [Short-Term Disability Benefits]
3Day 90+:     [Long-Term Disability Begins (if 90-day elimination period)]

The ideal setup:

1. Use sick leave for the first few days
2. Short-term disability kicks in after waiting period
3. Long-term disability begins when short-term ends

When You Need Each Type

You Need Short-Term Disability If:

• Your employer doesn’t provide adequate sick leave
• You have limited savings for emergencies
• You’re planning a pregnancy
• You work in a physically demanding job
• You want coverage for minor surgeries/injuries

You Need Long-Term Disability If:

• You rely on your income (most people)
• You don’t have 6+ months of expenses saved
• You’re the primary earner for your family
• Your employer doesn’t provide it
• You want protection until retirement

You Need Both If:

• You want comprehensive income protection
• You have dependents relying on your income
• You can’t afford any gap in coverage
• Your long-term policy has a long elimination period

Employer vs Individual Policies

Employer-Provided Coverage

Pros:

• Often free or heavily subsidized
• No medical underwriting
• Easy to enroll

Cons:

• Lose it when you leave the job
• Benefits may be taxable
• Limited customization
• May not be enough coverage

Individual Coverage

Pros:

• Portable (keep it when you change jobs)
• Benefits are tax-free (if you pay premiums)
• Customize to your needs
• More policy options

Cons:

• More expensive
• Requires medical underwriting
• Must shop and compare yourself

Making Your Decision

1. Check employer benefits first - Many employers provide short-term coverage
2. Calculate your coverage gap - How long could you survive without income?
3. Prioritize long-term if choosing one - Extended disabilities are more financially devastating
4. Consider individual supplemental coverage - Even with employer benefits, you may need more
5. Match waiting periods - Align STD end with LTD start

Tools

• Coverage Quiz - Find out what insurance types you need based on your situation
• Life Insurance Needs Calculator - Calculate income replacement needs for your family

Related Guides

• Disability Insurance Guide
• Supplemental Disability Insurance
• Disability Insurance Costs

Data Sources

Disability insurance information in this guide comes from industry reports and insurer rate filings. Learn more about our data collection methods on our Methodology page.