What are the types of disability insurance in the USA?

Social Security Disability Insurance (SSDI) payments are one of the ways that the Social Security Administration (SSA) supports people in need.

To qualify for the SSDI individuals must be registered as disabled, of which the SSA publishes a list, and must also satisfy certain work history requirements. Bear in mind that family members working (spouse or parent) can also be used to satisfy the requirements, which would be difficult for many to achieve who are born disabled.

However, these payments do not cover the full range of disabilities and insurance is required for extra injuries suffered.

Short-term insurance coverage period

The coverage of this type of insurance can vary from as short as 30 days to no more than two years, after which you may need long-term disability insurance. Usually payments are made within a fortnight of an injury.

To qualify for short-term coverage, you must have an injury, illness, or medical condition that makes you physically unable to perform your job. Certain plans can include coverage of mental illness or even pregnancy. However, if your employer provides paid family leave, you may not qualify for short-term disability for pregnancy or childbirth.

This kind of insurance usually provides for rehabilitation, so that the person insured can return to work as soon as possible.

Long-term insurance coverage period

These insurance plans take a much longer time to payout compared to short-term coverage, perhaps up to three months. However, depending on the policy paid for the coverage could last until your death. Typically long-term coverage pays out for two years, five years, 10 years, to age 65 when it is likely you would be retiring anyway.

Of course this means higher premiums but potentially without people could be brought to financial ruin.