Are you considering purchasing disability insurance? Here’s what you need to know about the difference between long-term and short-term disability insurance and how to decide which is right for you. 

When you have big investments, such as a home and mortgage, it’s crucial to take adequate steps to protect yourself and your family financially. Disability insurance coverage protects you from loss of income when an unexpected accident or injury occurs.

Long-term and short-term disability insurance is designed specifically to help cover your medical and home expenses if you’re unable to work due to an injury.

It can be especially beneficial if:

  • your family members are dependent on your income
  • you have a high-risk job (eg. construction worker)
  • you don’t have an emergency fund to cover a sudden income loss
  • you have debt obligations (eg. car and mortgage payments)
  • you have a predisposed condition

Affordable and Flexible Disability Insurance

At 20/20, we understand that life is unpredictable, which is why we offer affordable, customizable, and comprehensive mortgage life, critical illness, and disability insurance to suit your family’s individual needs and budget.

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Short-Term vs Long-Term Disability Insurance

Disability insurance is designed to cover your lost income should you be unable to work due to an unexpected injury. Some policies cover you for a short period (months), while others will provide you with stable benefits for many years.

Deciding whether to get long-term or short-term disability insurance is not an easy choice and will depend on your specific needs, expectations, and budget.

Here’s what you need to know about short-term vs long-term disability insurance so you can decide which is right for you:

Short-Term Disability Insurance

Short-term disability insurance is designed to cover individuals who are unable to work for short periods of time. Typically, this type of policy lasts between 3-6 months and because of this, short-term disability insurance tends to be the more affordable option.

Limitations of Short-Term Disability Insurance

  • When the benefits run out after a few months, the disabled individual will be left on their own for the long-term.
  • Short-term policies usually have fewer protections for payouts under certain circumstances such as death, or when the policyholder becomes disabled closer to retirement age.

How do you know if short-term disability insurance is right for you?

Despite it’s certain drawbacks, short-term disability insurance may be the right option if you:

  • have a limited emergency fund to cover the first few months of a disability
  • prefer lower monthly payments
  • already have long-term disability coverage through your employer

Long-Term Disability Insurance

Long-term disability insurance provides monthly payments in the event of a disability that lasts 6 months or longer and some can provide benefits until you reach the age of 75 or older. With this type of policy, you can rest assured that your coverage will continue for as long as the disability lasts.

Limitations of Long-Term Disability Insurance

  • It costs substantially more than short-term disability insurance.
  • These policies usually have a longer waiting period (typically 3-6 months before you begin receiving benefits).
  • The payment plans of some long-term disability insurance policies may change after two years of continuous disability.

How do you know if long-term disability insurance is right for you?

Because of these benefits and drawbacks, long-term disability insurance is typically the right choice for individuals who:

  • have an emergency fund that can cover them for the first few months of their disability
  • can afford higher premiums in exchange for long-term benefits


Short-Term vs Long-Term Disability Insurance: Quick Facts

With the different types of disability insurance, deciding which option is right for you can get overwhelming. To help you make a more informed decision, here are some quick facts about short vs long-term disability insurance.

Short-Term Disability Insurance

  • Benefits Duration: Up to 24 months
  • Waiting Period: Immediately - 2 weeks
  • Payment Amount: Typically 80% of your salary for the first few payments, and then lower for the remaining ones.

Long-Term Disability Insurance

  • Benefits Duration: Up to 75 years or above
  • Waiting Period: 3-6 months
  • Payment Amount: Typically 70% of your salary

Call Today

To find out more about the costs and benefits of our mortgage disability life insurance, contact one of our licensed agents today at 1-844-974-2020 or fill in our online contact form.

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