If you have short-term disability insurance coverage, which many employers offer, you may be protected from a situation where the coronavirus leaves you unable to work. However, you can only claim disability benefits if a doctor or other medical professional verifies that you are unable to go to work. If you have long-term disability insurance and you suffer complications that keep you out of work for 90 days or more (varies by policy), then you may be able to claim long-term disability benefits.
“Essentially, there has to be a medical reason you can’t work, such as a medical quarantine. And a social quarantine is not a medical quarantine,” explains Nicholas Mancuso, manager of the disability and advanced planning team at Policygenius.
Social quarantines, like when a state mandates that people work from home, do not qualify you for disability benefits. Disability insurance also won’t cover you if you lose your job or income because your employer is closed. (You may qualify for unemployment benefits.)
If you’re already sick, you can’t purchase disability insurance to cover complications from that illness . That’s why it’s important to get a policy before you’re sick and before you have to worry about income or job loss. Younger and healthier individuals will get the best rates, so brush up now on how disability insurance works and who needs it.
Short-term vs. long-term disability insurance
Before you claim any disability benefits, it’s useful to remember that there are two main types of disability insurance: short-term disability insurance (STDI) and long-term disability insurance (LTD).
What is short-term disability insurance?
Short-term disability insurance provides income replacement — usually up to 80% of your gross income — in the event that you sustain a medical condition or disability that prevents you from being able to do your work. An STDI policy usually starts making payments 14 days after you apply for benefits, and coverage usually lasts for three to six months. STDI is most common as a benefit from your employer and private STDI plans are too expensive to be worth it for most people.
What is long-term disability insurance?
Long-term disability insurance only offers benefits (payments) after you’ve been living with a medical condition or other disability for a longer period of time. This waiting period is called an elimination period and is usually 90 days, but it can be as long as 180 or even 360 days depending on your LTD policy. Your policy may then pay out for two years, five years, 10 years, or even until you retire. Some employers offer LTD policies but they may not be sufficient to cover your needs. Long-term disability benefits usually cover about 60% of your income.
Learn more short-term vs long-term disability insurance to see which you need.
Does short-term disability insurance cover coronavirus?
Short-term disability insurance will cover illness from COVID-19 and any other coronavirus-related illnesses only if you can no longer work because of a clear medical reason, like a medical quarantine. If you are sick but can still perform your job duties, you cannot qualify for disability benefits. In more technical terms, you need to have a verified medical limitation.
For many people who test positive for COVID-19, the clearest situation where you can claim short-term disability benefits is when a doctor or other medical professional requires you to self-isolate, if that leaves you unable to do your job. For example, if a nurse was diagnosed with COVID-19 and could no longer perform their duties as a nurse because they had to self-isolate, this would qualify for short-term disability benefits.
However, as noted by Mancuso, “In the event you do get the coronavirus and need to stay at home, you do need to get medical verification from a third party. Some hospitals are turning away individuals who don’t require immediate attention, but you can’t claim benefits unless you have that verification.”
The recommendation from Mancuso is that if you can’t meet with a doctor at your local hospital, look for a virtual doctor. Many health care providers already have virtual services (sometimes called teledoctors). These can get you the verification you need to claim disability benefits, and they also prevent you from going outside (and possibly spreading COVID-19) any more than is necessary.
Also read: Will my travel insurance cover coronavirus?
Does long-term disability insurance cover coronavirus?
You likely won’t be able to claim long-term benefits because of coronavirus unless you have long-term complications, like a chronic illness that results from your COVID-19 illness.
According to Mancuso, “It’s generally more difficult to qualify for long-term disability benefits with the coronavirus because of elimination periods for long-term policies.” The elimination period of a disability insurance policy is how long you must be unable to work — for medical reasons — before you can start receiving benefits. LTD policies have elimination periods of at least 90 days.
To claim LTD benefits because of coronavirus, you need to satisfy the same requirements as with short-term benefits: you must be unable to work because of a clear medical condition that has been verified by a doctor or other medical professional. That can include a medical quarantine. However, doctor-mandated quarantines for the coronavirus have not yet required 90 days or more.
It’s also important to remember that a social quarantine is not a medical quarantine. If your city, your state, or even the federal government requires everyone to work from home, that is not a medical quarantine. For example, restaurant workers who cannot work because their state required all restaurants to close will not be able to claim disability benefits, even if their employer remains closed for many months. However, you may be able to claim unemployment benefits if you are laid off.
There may be other long-term health issues for survivors of the coronavirus, but they will only qualify you for LTD benefits if they cause a disability that makes it impossible for you to work or live normally.
If you’re shopping for disability insurance, it might also be a good time to double-check your life insurance coverage. Check out our guide to whether life insurance covers coronavirus and learn the five things to watch out for when shopping for coverage.
Should you apply for disability insurance in case you get COVID-19?
Yes. Long-term disability benefits offer valuable protection and provide a safety net for you and your family in case you can no longer work. Even if your employer offers short-term disability, this may only cover you for three months. If you sustain a serious illness, like a chronic respiratory illness after dealing with COVID-19, your STDI benefits won’t last long enough to pay all your bills. Long-term disability insurance may offer some financial protection if the coronavirus or any other type of medical issue causes you to become permanently disabled.
As Mancuso says, “We don’t know what the long-term effects of the coronavirus will be, and we don’t know what pandemic could happen in the future. If coronavirus starts you thinking about what happens if you get sick and can’t work, you should use it as a catalyst to get covered.”
When to apply for disability insurance
While you’re young and healthy is the best time to get disability insurance (even though that sounds counterintuitive) because you will receive the lowest rates. The longer you wait, the more expensive plans will get. And if you wait until you’re already sick, insurers won’t give you a policy at all. You will also have to wait a certain amount of time after being sick before you can apply, which will only mean even higher rates.
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