Short-Term vs. Long-Term Disability: What’s the Difference?

Your income is the only way to build a financial safety net. If an illness or injury occurs, disability insurance can help replace a part of your income. There are two types of disability insurance: short and long-term disability insurance. Here’s a simple way to distinguish between them and understand how they can complement each other.

1. What Each One Covers?

• Short‑Term Disability (STD): For temporary issues like surgery recovery or a serious illness, that keep you out for weeks or months.
• Long‑Term Disability (LTD): For longer health events that last many months or even years.

2. How Long They Pay?

• STD: Usually pays for a short period (often up to a few months), then ends.
• LTD: Can pay for several years or until you reach a set age, depending on the policy.

3. When Payments Start (Waiting Period)?

• STD: Often starts after a short waiting period, such as about a week.
• LTD: Usually begins after a longer waiting period, which often starts when the STD ends. This hand‑off is key.

4. How Much of Your Income Is Replaced?

Both types replace a portion of your paycheck. The exact percent varies by policy. Some benefits may be taxable based on how premiums are paid. Your HR team or agent can explain your setup in plain terms.

5. Where You Get It and What It Costs?

Many people get STD at work. LTD may be offered at work too, or you can buy your own policy for stronger, portable protection. Personal policies can let you shape key terms, like job definition and benefit length.

6. Do You Need Both?

Often, yes. Think of STD as your bridge for the first phase, and LTD as the long road if recovery takes more time. Together, they help keep your bills paid and your savings intact.

A health setback should not become a money crisis. Disability insurance whether short term or long term, can protect your income when you need it most. Review what you have, note any gaps and consider adding coverage so your lifestyle stays steady while you heal.