This material has been prepared for educational purposes only. It is not intended to provide, and should not be relied upon for, investment, accounting, legal or tax advice.
When Does Short-Term Disability Become Long-Term?
Short-term disability insurance typically covers 80% of three to six months of income and kicks in after an injury or illness (with a waiting period). It can be expensive to buy on your own and some employers offer as a benefit.
Long-term disability insurance usually covers 60% of income for any number of years up to retirement (also with a waiting period that can be lengthy). It’s more affordable but with lower benefits. Pairing up this coverage with an emergency fund is critical.