Short and long term disability insurance policies are policies bought by you or your insurer to protect you from loss of income in the event that you are unable to work due to illness, injury, or accident for an extended period of time.  Long term disability insurance does not provide insurance for work-related accidents or injuries that are covered by workers’ compensation insurance. 

Disability insurance pays you a percentage of your normal salary if you cannot work due to sickness or a disabling injury.  Disability insurance is usually provided by employers, however, if a company doesn’t offer disability insurance or if an employee wants additional coverage, he or she has the option of purchasing an individual disability plan from an insurance agent.

Once short-term disability insurance benefits expire (generally after three to six months), the long term disability insurance pays an employee a percentage of their salary, typically 50-70%.  Some policies only pay benefits for a defined period of time, for example, two-ten years. Others pay an employee until he or she is 65 years old. Most short term disability insurance plans include certain specifications regarding the employee’s eligibility to receive benefits. For example, some plans indicate a minimum length of time that a worker must have been employed for and may require that the employee works full-time or has worked consecutively for a certain period of time.  Each disability insurance policy has different conditions for payout, diseases or pre-existing conditions that may be excluded, and various other conditions that make the policy more or less useful to an employee.