What is the definition of Short-Term Disability Income Insurance?

Short-Term Disability Income Insurance refers to disability income benefits given by the insurance company to an insured person in the event of his disability. As the name suggests, this is just a short-term benefit and the benefits will usually be provided for a limited time period (say one to five years).

The advantage with short-term disability income insurance versus long-term disability income is that there is usually a shorter waiting periods before the income benefit payments start to kick in. Premiums for this type of cover are also lower.

However, since it pays only for a shorter time period, long-term disability income insurance is a more attractive option, since even when it has a longer waiting period, it will pay for as long as the insured person is disable - until the insured person reaches retirement age (65 years). There are even some policies that pay for the insured person's lifetime.

• Insolvency
• Misstatement of Age or Sex Provision
• Modified Premium Policies
• Moral Hazard
• Comprehensive Coverage