Disability Insurance

Short-term disability (STD) and long-term disability (LTD) are both types of insurance coverage designed to provide income replacement when an individual is unable to work due to illness, injury, or other qualifying conditions. However, they differ primarily in terms of duration, eligibility criteria, and the length of coverage.

Duration:

1. Short-term disability typically provides coverage for a limited duration, usually ranging from a few weeks up to six months, although specific terms may vary depending on the policy.
2. Long-term disability coverage, on the other hand, kicks in after the short-term disability period ends, and typically provides benefits for a more extended period, ranging from several months to years, or even until retirement age, depending on the policy terms.

Eligibility:

1. Short-term disability benefits often have a shorter waiting period before benefits start, usually ranging from 0 to 14 days after the onset of disability.
2. Long-term disability benefits usually have a longer waiting period, commonly ranging from several weeks to several months after the onset of disability. This waiting period is often covered by short-term disability benefits or savings.

Coverage:

1. Short-term disability benefits typically cover a percentage of the individual's pre-disability income, usually ranging from 60% to 80%, for the specified short-term duration.
2. Long-term disability benefits may also cover a percentage of pre-disability income, but the coverage amount and duration are usually different. Long-term disability benefits may cover a smaller percentage of pre-disability income but for a longer period, often until the individual is able to return to work, reaches retirement age, or until the policy term ends.

Medical Requirements:

1. Short-term disability often requires less stringent medical documentation to prove eligibility, as it covers shorter-term disabilities that are expected to resolve relatively quickly.
2. Long-term disability typically requires more thorough medical documentation to demonstrate the severity and permanence of the disability since it covers more extended periods and often involves more serious conditions.

In summary, short-term disability provides temporary income replacement for shorter periods, usually with a shorter waiting period and less stringent eligibility requirements, while long-term disability provides more extended coverage for individuals who are unable to work for an extended period due to disability.

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