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Short-Term vs. Long-Term Disability Insurance

Suffering an injury that temporarily or permanently takes you out of work can lead to significant financial stress for you and your family. You may be eligible for short-term and/or long-term disability insurance benefits to help bridge the gap between your former income and what you make now. Find out if these insurance benefits are available to you after an accident in Arizona.

Short-Term Disability Insurance

Short-term disability (STD) insurance is a type of coverage that offers benefits to replace lost income for injuries or illnesses that take a person temporarily out of work. It pays to replace wages for short-term disabilities that are not related to the victim’s occupation; if the injury did occur on the job, workers’ compensation insurance will provide short-term disability benefits instead.

Short-term disability benefits may be provided by the insurance company of the person or party at fault for causing the accident in question. This could be the victim’s employer or another party, such as a driver or property owner. These benefits could also be self-funded if the victim’s own insurance company is liable for losses and the victim has the correct type of insurance.

The amount of short-term disability insurance available will depend on the limits of the insurance policy and the duration of the claimant’s injury. The settlement granted will also change according to the claimant’s average income, as it serves to replace lost income while the victim is out of work and in recovery. Most STD plans pay for 50% to 60% of a client’s weekly earnings, with a cap.

Long-Term Disability Insurance

Long-term disability (LTD) insurance provides the same benefits as short-term; it pays for a portion of a victim’s lost wages due to an injury or illness that renders him or her incapable of working. However, long-term disability insurance pays lost wages for a longer amount of time.

Most long-term disability benefits can replace lost earnings for a number of years. The exact length of coverage will depend on factors such as the severity of the injury and disability. The payment period may be 2, 5, 10 or more years. Some claimants receive LTD benefits until the average retirement age of 65. Others continue receiving disability insurance checks for life.

Can STD Benefits Be Transitioned to LTD?

Yes, short-term benefits can transition to long-term disability insurance benefits, if necessary. The transition process is generally straightforward. The client must meet the definition of disability under the stipulations of the insurance company’s long-term plan. If this is the case, long-term disability can pay for ongoing lost wages after short-term disability benefits expire.

Most insurance companies transition coverage to a long-term disability payment without a gap in benefits. The client may or may not need to fill out new paperwork and submit new medical records to obtain LTD benefits. In addition to transitioning your insurance coverage, the insurance company may also recommend that you apply for Social Security disability benefits for a long-term disability.

What If My Claim Is Wrongfully Denied?

If you are eligible for insurance benefits, filled out all the necessary paperwork, filed your claim by the deadline and submitted the required evidence of your injuries but an insurance company still denied your claim, you may be the victim of a wrongful claim denial. Insurance companies may wrongfully deny claims to protect their profitability.

If you believe your claim for short- or long-term disability benefits has been wrongfully denied, contact an attorney for assistance. A bad-faith insurance lawyer in Arizona can help you fight for the benefits you deserve. Your lawyer can work to understand the reason for the denial. Then, your lawyer can help you with the appeals process, such as requesting an internal review or asking a third-party to look over your claim. Hiring an attorney can help you obtain the disability benefits you and your family need to pay the bills and move forward.