Every insurance policy has its own wording, guidelines and coverages, but both short-term and long-term disability policies typically provide a percentage of an employee’s earnings as income replacement if the employee qualifies for benefits.
An employee can only start receiving LTD benefits after their Employment Insurance or short-term disability coverage has ended. Some of the differences between short-term disability and long-term disability coverage include:
• Short-term disability insurance sometimes provides a higher percentage or maximum payment than LTD benefits, however, LTD benefits are paid over a much longer period of time.
• Short-term disability benefits typically only cover an employee’s earnings whereas long-term disability benefits tend to include rehabilitation and medical expense coverage.
• Claims processing happens a lot faster with short-term disability benefits as they are meant to be approved within days or weeks of an employee applying for them. LTD claims can take months to process after they have been submitted.
• LTD benefits can be stopped after a specified period of time (usually two years) if the insurance company feels that the employee is able to work in another occupation to which they are reasonably suited. Short-term disability policies are not subject to this change in the definition of what is considered a 'disability'.