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June 22, 2022

Pasadena, CA – Comparing Long-Term vs. Short-Term Disability Insurance Plans

Posted in: Industry News

The term ‘Disability’ covers a broad spectrum of conditions, but many employers overlook the need for Long-Term or Short-Term Disability Coverage for their team.

Disability Insurance is interchangeably referred to as Disability Income Insurance because it serves to replace a portion of an employee’s income should they become unable to work due to severe illness or injury. Implementing Disability Income Insurance signals to your staff that you value their contribution and have taken steps to ensure they have financial protection in the event of circumstances outside of their control.

Long-Term and Short-Term Disability Insurance Plans Attract Talent

The Council for Disability Awareness publicized data that indicates almost half of American adults don’t have enough savings to cover their living expenses if they lose their income. For most Americans, the fear of incurring a debilitating injury or being diagnosed with an illness intensifies with the thought of the financial hit they will take.

Most prospective employees consider the available benefits packages when deciding whether to apply for or accept a position. Offering Disability Insurance will broaden the scope of talent who will consider your business a viable option and increase your rate of employee retention in the long term.

Long-Term and Short-Term Disability Insurance Plans Cover Vastly Different Time-Frames 

The difference between Long-Term and Short-Term Disability Insurance is the benefit period. The various policies on the market differ in how they define short and long-term periods. Generally, Long-Term Disability Insurance is an involved commitment, with the benefit period expressed in years. Five, ten, and even twenty-year benefit periods are available. On the other hand, Short-Term Disability Insurance Plans provide coverage for around three to six months.

Long-Term and Short-Term Disability Insurance Plans Offer Different Levels of Coverage

Long-Term Disability Insurance Plans generally pay benefits covering 40-70% of an individual’s income for a sustained period. Short-Term Disability Insurance Plans, on the other hand, ensure the worker is protected for a greater percentage of their income, albeit for a much shorter time. As an employer, it is a daunting prospect to assess the needs of your employees and ascertain what coverage they are most likely to require.

The advantages of both are apparent. Long-Term Disability Insurance Coverage signifies to employees that you share a lifetime commitment to their health and wellbeing. Short-Term Disability Insurance Coverage signals that you understand the unexpected nature of daily life and wish to help your team stay prepared for anything that comes their way.

Navigating Long-Term and Short-Term Disability Insurance Plans Is Time-Consuming and Difficult

With this in mind, Employee Retention Benefits (ERB) is here to help. As the top-rated employee benefits firm on the West Coast, we provide the advantage of decades of experience paired with up-to-the-minute industry knowledge. If your business is in the Pasadena, CA area, we can help you compile the best insurance options.


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