The HL Group

Protecting What's Most Important In Life.

Wherever life takes you in today’s rapidly expanding world, the HL Group will be there to help you manage your risks with confidence– keeping both your personal and organization safe, compliant and protected. A national leading provider of protection solutions, we have local market expertise and on-the-ground resources that span an expansive network. Our investment in people, processes and technology means customers today benefit from our expertise and service – delivered seamlessly throughout the nation like never before.

Portfolio solutions for your every need.

The difference between Short-term and Long-term Disability Insurance.

While researching long-term disability insurance, you may have come across short-term disability insurance. What’s the difference between short-term and long-term disability insurance?

The main difference between the two products is how long they last. Short-term disability insurance lasts for a shorter period of time, usually starting at a few months and no longer than a year. Your long-term disability insurance will not begin until any short-term disability benefits have been exhausted. Long-term disability insurance, on the other hand, can last until your retirement.

Private Short-term disability insurance policies are available, but short-term disability insurance is usually only cost effect through an employer.

Other alternatives to short-term and long-term disability insurance are Social Security disability insurance (SSDI), self-funding via an emergency fund, workers comp, or relying on friends and family for financial support. However, these are imperfect options that may not be feasible for covering the cost of a multi-year disability; for example, Social Security disability insurance is difficult to qualify for and may be limited compared to your coverage needs.

How much does Long-term Disability Insurance cost?

Average long-term disability insurance rates cost between 1-3% of your annual salary, but the exact cost will depend on a number of factors about the applicant and the policy chosen.

Applicant factors:

Age – The older you are, the more expensive your policy.
Gender – Women make more disability claims and therefore pay more for policies.
Smoking history – Smokers or recent smokers will have more expensive policies.
State of residence – Residents of states with a higher number of disability claims will pay more for policies.
Occupation class – Depending on elements of your job (including manual duties, travel, and more) you may be classified as having a “riskier” occupation and pay more for your policy

Policy factors:

Coverage amount – Higher coverage amounts result in higher premiums.
Benefit period – Longer benefit periods result in higher premiums. The most cost-effective benefit period is five years, but full coverage extends to age 65.
Waiting period – Longer waiting periods result in lower premiums. The most cost-effective waiting period is 90 days.
Built-in policy features – Some features like own occupation coverage may come standard in policies from some carriers and may affect the cost of the policy.
Riders – Additional feature that don’t come standard may raise the cost of the policy.