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Disability Insurance

Two types of disability insurance are available as a work benefit. Short-term disability provides income when an employee becomes temporarily disabled due to accident or illness. There is a waiting period before the insurance pays benefits. The benefits will pay out for 26 weeks. After a period of 26 weeks, short-term disability ceases. These benefits replace 50-67 percent of an employee’s income.

Long-term disability insurance is similar to short-term insurance, except it covers employees who become disabled and are unable to work for six months or longer. The benefits, which are about 50-60 percent of the employee’s income, can continue to retirement age. Permanent disability is not a requirement, but the employee should have been a full-time employee for at least a year.

The Social Security Administration also provides benefits for people who meet their requirements. However, benefits are reduced by the amount the person receives from workers’ compensation. Workplace benefits of long- or short-term disability insurance do no reduce the benefits.