Industry Resource Articles

Five Tips for Buying Short Term Disability Insurance – Helpful Hints to Remember

Over eighteen million Americans between the ages of eighteen and sixty four are currently classified as disabled, and over two and half million workers are currently receiving SSDI benefits. These surprising numbers highlight the high incidence of disability in our country and the importance of offering your workers short term disability insurance. Short term disability insurance provides your employees with a way to still bring some level of income into their home for a period of time while they recover from a disabling illness or injury. Over sixty percent of private sector workers lack short term disability insurance, and most will be unable to meet their bills without it. Here are five tips for choosing the best short term disability insurance policies.

  1. Get a Concrete Definition – Start by simply understanding what a short term disability insurance policy defines 'disabled' as. One issue to look for in short term disability insurance definitions will be if the disability only prevents you from working at your current job. If you could work in another field, even if it pays far less, some short term disability insurance won't consider you disabled. This is especially important if you've held a job for an extended period of time and gained tenure. Your short term disability insurance will do you little good in some cases.

 

  1. Look for COLA – Short term disability insurance should come with COLA, or Cost Of Living Adjustment. This means that as inflation rises, your premium payouts will rise along with it. Depending upon the exact terms of your short term disability insurance this may not be a factor, but it's still worth looking into when shopping for short term disability insurance.

 

  1. Check Maximum Benefit Levels – Short term disability insurance will rarely pay out an amount equal to your full salary. This is because paying your full salary will make it less likely that you return to work. Most short term disability insurance plans offer payments of seventy percent of your salary or less, although some could reach eighty percent with higher monthly payments. However, most short term disability insurance is tax free and a seventy percent payout will come close to your take-home pay anyway. No matter what, be sure to check the benefit level of your short term disability insurance before you sign.

 

  1. Length of Coverage is Vital – Short term disability insurance will, obviously, cover you for less time than long term coverage. Still, many short term disability insurance plans will offer varying timetables as far as how long they'll pay out. When buying short term disability insurance this is an important factor to remember.

 

  1. Non-Cancellable Policies are Best – Buying short term disability insurance with a non-cancellable clause will help protect you against rate increases in your short term disability insurance plan. It's an important factor to consider when you buy short term disability insurance.

Short term disability insurance is an important benefit that most employees are beginning to desire more and more. Unicorn HRO offers solutions for short term disability insurance implementation and management. Keep the five points above in mind when buying short term disability insurance and you'll be sure to get a great policy.

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