Short Term vs. Long Term Disability Insurance
Long Term Disability
What’s the difference?
Disability insurance provides coverage in the event you’re unable to work or care for your family due to a covered injury or illness. Disability benefits can help replace lost income and can be applied however you wish, from utility and mortgage payments to child care and even student loan repayments.
Both Short Term Disability (STD) and Long Term Disability (LTD) insurance help provide income protection while you are disabled. The main differences are the length of the benefit periods and the amount of coverage each type of policy offers.
Discounted Income Protection Plans
Our individual plans provide coverage in the event you’re too sick or injured to work or to care for your family. Own and keep your policy, even if you change jobs.
STD Insurance
As the name implies, STD insurance is intended to cover you temporarily after you’ve suffered an injury or an illness that keeps you out of work. While policies vary, STD insurance usually covers a period that lasts 3-6 months. The elimination period – the waiting period before benefits kick in – is also short – usually seven 7-14 days.
While both types of disability coverage provide benefits as a percentage of your income, STD insurance insures a greater percentage of your income, generally up to 70%. Common STD claims are for pregnancy, accidents, and surgeries.
Just under one fourth of today’s 20-year-olds will end up out of work for at least one year due to a disabling condition before they reach retirement age.1
LTD Insurance
LTD insurance can provide income protection for a much longer period. Benefit periods are usually stated in years–5, 10 or even to retirement–depending on your policy. Benefits are typically capped at 60% of your income, but paid for a greater length of time. LTD elimination periods are also longer, commonly 90-180 days.
The most common reasons for long term disabilities are musculoskeletal disorders, cancer, mental health issues, and injuries such as fractures or sprains.2
Many employers offer both STD and LTD insurance, and while these plans provide valuable benefits, employer coverage has limitations. Adding a robust individual LTD plan like those offered through the Alum LTD program, with “own-occupation” coverage for as long a benefit period as you’d like, can close the gap. Our trusted Advisors can help you customize an LTD plan for your individual needs.
1Disability and Death Probability Tables for Insured Workers Who Attain Age 20 in 2024. Social Security Administration. https://www.ssa.gov/oact/NOTES/ran6/an2024-6.pdf Table A, Column 1 (Probability of Disability Before NRA). August, 2024.
2Disability Statistics. Council for Disability Income Awareness. thecdia.org/disability-statistics/. Accessed August 21, 2025.
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