Short-Term Disability
Insurance coverage that provides partial income replacement for employees who are temporarily unable to work due to illness or injury. Benefits typically last from a few weeks to one year, covering a percentage of the employee's regular salary during their recovery period.
Example
“After breaking her leg in a skiing accident, Maria received short-term disability benefits that covered 60% of her salary for the three months she couldn't work.”
Memory Tip
Think 'SHORT pause in pay' - it's temporary income support for a short medical break from work.
Why It Matters
Short-term disability provides crucial financial stability when unexpected medical issues prevent you from working. Without this coverage, a temporary illness or injury could quickly deplete savings and create financial hardship during an already stressful recovery period.
Common Misconception
Many people think short-term disability covers all medical expenses, but it only replaces a portion of lost income. The coverage doesn't pay medical bills - that's what health insurance is for - and typically only provides 50-70% of your regular salary.
In Practice
Sarah earns $4,000 monthly and has short-term disability coverage through her employer that pays 60% of her salary. When she needs surgery and 8 weeks of recovery, she receives $2,400 per month during her absence. Her employer's plan has a 7-day waiting period, so she uses sick leave for the first week before disability benefits begin. The coverage helps her maintain most of her income while focusing on recovery.
Etymology
The term emerged in the mid-20th century as employers began offering systematic income protection for temporary work absences due to non-work-related medical conditions.
Common Misspellings
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