The best way to get standard coverage is through your employer. In many cases, the coverage is required by the state or provided as an employment benefit paid in full by the employer. Other companies offer it as part of their “voluntary” or optional employee benefits package, meaning you’ll pay at least part of the cost. Even if you have to pay the full premium, it’s probably your best option for standard coverage because:
- Compared to an individual plan, the coverage you get through work will have relatively lower group rates.
- Workplace plans generally have fewer pre-existing condition exclusions and offer more features and broader coverage, such as coverage for pregnancy and mental health issues.
- acceptance is usually automatic.
- Costs may be higher compared to an employer plan with group rates.
- Acceptance is not automatic: Underwriting (i.e. the insurer’s underwriting process) is more stringent and they will want to assess your age, health and other factors before issuing a policy.
- pregnancy, if covered, could be considered a pre-existing condition if you are already pregnant.
- many employers offer these types of plans as a voluntary benefit.
- Affordable plans can also be purchased directly from insurance companies like Guardian.
You can also purchase an individual plan through an agent or broker. However, there are some drawbacks to purchasing short-term disability insurance on your own:
state mandated disability and family pay & medical leave plans
Some states offer disability income protection or state-sponsored medical leave for their residents, but you have to live and/or work in that state to qualify. it is paid through mandatory deductions from employees’ payroll, and the plans provide short-term wage replacement benefits for non-work-related disabilities (work-related disability is covered by worker’s compensation). To see if your state offers this type of program, contact your state’s department of labor or employment.
accident insurance and critical illness plans
This is coverage that generally provides a cash payment, as opposed to ongoing disability income replacement, if you are in an accident or diagnosed with a significant health problem. the benefit is paid even if you don’t miss work and can be used for any purpose.
If you don’t have access to standard group coverage through work, you may want to plan to set aside six or more months’ salary in a non-retirement savings account so you’ll have something to rely on in the event of a medical condition that prevents you from working.
long-term disability coverage
Many professionals believe that people without employer-provided short-term disability are better off investing in a long-term disability plan, while relying on savings or one of the above alternatives for short-term needs. it’s a topic worth discussing with your financial advisor; If you don’t have one, Guardian can connect you with a professional or provide you with a long-term disability insurance quote online.
In Summary: The Pros and Cons of Short-Term Disability Insurance
The value of a standard policy has a lot to do with how you get your coverage. if your employer pays for your short-term disability, or if you have state-mandated coverage, then there is no problem, even if the benefits provided are somewhat limited. Many employers offer STD as an optional voluntary benefit and subsidize part of the cost. even if they don’t, you should probably opt for coverage because acceptance is automatic, and with group rates, the amount deducted per paycheck will be relatively low.
Compared to a group plan, individual standard plan premiums will be higher, coverage may not be as extensive, and acceptance is not guaranteed.
In any case, short-term disability coverage only provides benefits for a limited period of time, usually 3-6 months. for a longer or more severe disability, you will also need long-term disability coverage. That’s why it’s worth talking to a financial professional about your general protection needs.