One of the most valuable assets you have is your ability to work. It’s what pays the bills, keeps a roof over your head and puts food on the table. If you’re no longer able to work due to illness or injury, it can put a strain on your finances. If you have a short-term disability insurance plan, though, it can help provide income as you decide your next steps.
Understanding Short-term Disability Plans
Short-term disability plans provide you with an income when you’re unable to work. You may have a policy through your employer, or you may have purchased one yourself. Each policy has its own benefits and requirements that you need to meet in order to receive a benefit.
Short-term disability policies typically last from nine weeks to up to one year. You may have a waiting period before you begin receiving benefits. To receive benefits, you must no longer be able to work either at your own job or at any job. Your policy will specify which definition applies. Policies that state "any job" could require you to accept work that is quite a bit different than what you did before the injury, possibly with a lower income.
Your policy may also provide support for returning to work. If you were full-time, for example, but can only return part-time, your policy may help make up the difference. Once your policy has finished, you may be able to switch to a long-term disability plan or apply for Social Security disability benefits.
Calculating Your Benefits
Short-term disability plans pay benefits based on your pre-tax income. Policies vary but typically pay between 40 percent and 70 percent of your pre-tax income. To calculate your benefits, multiply your weekly gross income by the percentage of income your policy pays. For example, if your policy pays 60 percent of your pre-tax income, and you earn $750 per week before taxes, your benefit will be $450 per week.
Filing a Claim
In order to file a claim and receive benefits, you will need to talk to your insurance company. If your plan is through your employer, talk to your human resources department to get their contact information. To file a claim, you will need to fill out forms, and authorize the insurance company to obtain information from your health care providers.
Once you’ve completed the required forms, the insurance company will review the claim and verify your information. They will make a decision regarding your claim. If your claim is approved, you will start receiving benefits, typically after a waiting period. If your claim is denied, you may be able to appeal the decision of the insurance company.