You can purchase a short-term disability insurance policy to provide coverage when you get hurt and are unable to work. This insurance acts as a subsidy for income until you're capable of returning to work. A standard short-term disability policy provides coverage up to a maximum of 26 weeks. When you purchase a short-term disability policy there are various factors to consider.
Most short-term disability polices come with a waiting period before you receive policy benefits. The length of the waiting period can vary by insurer and type of policy. A typical waiting period is 30 to 90 days. It's important to have savings in place to pay expenses during the waiting period.
Waiver of Premium
A short-term disability policy comes with options, such as the waiver of premium payments. This option is used when you become disabled and are unable to make premium payments for the policy. An insurer will waive the premium payments for a specified period or for the length of time you are disabled and cannot work.
Endorsements or riders, such as an inflation rider, can be attached to a short-term disability policy. Benefits paid by a short-term disability policy may not keep up with the rate of inflation. An inflation rider can be added that will adjust the benefit payment as inflation increases. The rider raises the cost of the policy.
A non-cancelable policy option guarantees an insurer will not cancel the insurance policy if you make all of the premium payments on time. A short-term disability policy that is non-cancelable will be more expensive. However, you may prefer the peace of mind knowing your policy cannot be canceled.
Many insurers who sell short-term disability policies provide a renewability guarantee. When an insurer guarantees the renewability of a policy it is automatically renewed without going through the underwriting process again or having an individual prove insurability. Rates generally do not increase unless the insurer raises rates for an entire class of people or a specific type of occupation.
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