Short-Term vs. Long-Term Disability: Choosing the Right Income Protection Plan

Disability insurance (Article 9) is crucial for protecting your income, but most employers and individual providers offer two distinct policies: **Short-Term Disability (STD)** and **Long-Term Disability (LTD)**. While both replace income, they are designed to cover very different durations of inability to work.

Key Differences in STD and LTD

Feature	Short-Term Disability (STD)	Long-Term Disability (LTD)
Duration	3 to 6 months (Max 1 year).	Years, often until age 65 or 67.
Waiting Period	Very short (0 to 14 days).	Long (90 to 180 days).
Payout %	Higher (60% to 80% of salary).	Lower (50% to 70% of salary).
Source	Most commonly employer-paid group plans.	Employer-group plans or robust individual policies.

The Overlap and the Gap

Ideally, these two policies work together. The **Short-Term Disability** plan provides quick cash flow during the initial recovery period (e.g., the first six months). When the STD benefits run out, the **Long-Term Disability** plan is there to take over, providing income throughout a lengthy recovery or chronic condition.

The Critical Takeaway: Never rely on just one. The biggest financial threat comes from a long-term inability to work. LTD is the essential protection against long-term financial collapse.

A comprehensive **income protection** strategy relies on having both STD for immediate needs and LTD for catastrophic financial risk management.