Important questions to ask when considering short-term disability insurance

In today’s world of unprecedented uncertainty, there are two concerns that many of us share: our health and our income.  As we think about these concerns and how they are related, one important benefit comes to mind during this global crisis we are experiencing.  Short-Term Disability coverage could be the difference in security and bankruptcy.  The Kaiser Family Foundation reports that the top three causes of bankruptcy are the inability to pay medical bills, losing your job and illness or injury. These are all things that our country is experiencing as a result of COVID-19.

What is important to know when selecting a short-term disability policy?

1.       When do benefits begin?

Many insurance companies have policies where coverage begins on the first day of your hospital stay. This is important because some policies may have waiting periods you have to satisfy before your benefits kick in and start paying out.

2.       What if I cannot pay the premium?

If you lost your job due to furlough or layoffs many disability carriers are making an exception during this pandemic to allow the disability coverage to be portable and continue as long as the premiums are still being paid.  If you find yourself in this position be sure to reach out to your employer about what options might be available in keeping your disability coverage.  Also, be sure to ask your disability carrier if they are offering any extended grace periods to pay the premium during this pandemic as many of them are.

3.       Do short-term disability policies cover mental health diagnosis?

While it is obvious to think about short term disability and a hospitalization for COVID-19, mental health diagnoses will likely see an uptick as many people today have increased anxiety from not experiencing this type of event in their lifetime before.  Others may suffer from depression because of increased isolation.  According to the Council for Disability Awareness, mental health is one of the top causes of short-term disabilities.

Please note: each short-term disability provider is handling the coronavirus pandemic differently.  For example, some insurance carriers will look at the recurrence of a disability and tack on another seven to fourteen-day waiting period while one specific carrier that we partner with has made the decision to eliminate the waiting period if you have a recurrence of symptoms and illness.  Knowing what questions to ask is important so you understand how your policy works.

Short-term disability policies are an important benefit many employers offer their employees, especially in these uncertain times. If you have questions about your policy, please contact the Fee Employee Benefits Team.

Josh Turner, Employee Benefits Consultant
FEE INSURANCE GROUP