New Yorkers who can’t work due to injury or illness have the option of long- or short-term disability insurance. It’s important to know the differences between these types of insurance.

What is disability insurance?

Disability insurance is a type of coverage that protects you in the event that you are injured or fall ill and need to miss time from work or cannot resume working at all. It protects your income as it replaces a portion of your wages while you’re unable to work. There are two types of disability insurance you can obtain: long-term or short-term.

What are the differences?

Short-term and long-term disability insurance differ in terms of how long you’ll receive benefits. Short-term benefits are available for a shorter time when an injury or illness keeps you from working for a short while. Long-term gives you benefits over a longer time when your disability prevents you from working.

The other difference between the two types of disability insurance is their term coverage. Short-term disability insurance covers a higher percentage of your income. It can cover you up to 80% in some cases. Meanwhile, long-term disability insurance coverage can cover your income from around 40 to 70% for a longer time period.

Should you choose short-term or long-term disability insurance?

The nature of your illness or injury that prevents you from working can determine whether you should opt for short-term or long-term disability insurance. If you have a sufficient emergency fund that can cover your expenses for several months, you might be better off with short-term disability coverage. On the other hand, if you rely on your regular paycheck to get by, you might want long-term disability insurance. However, it can take three to six months before you start receiving your benefits with long-term disability. Short-term benefits begin almost immediately to up to 14 weeks.

Knowing where you stand in terms of your disability is important when choosing short-term or long-term coverage. The payments should help you avoid financial hardship while injured or sick.