Difference Between Short Term and Long Term Disability Insurance
Disability insurance helps individuals safeguard against unexpected disabilities that could result in financial difficulties. Replacing a portion of lost income in disability makes it an important safety net. When thinking about purchasing a policy for a potential income loss due to a disabling condition, it’s important to understand that there are only two types of coverage available: short term and long term. Even though both serve to protect against loss of income resulting from disability, they contrast in the extent of coverage offered, duration and criteria for eligibility. In this article, we will cover short-term disability, long term disability, disability riders and how important it is to include riders when securing protection for disabled individuals.
Disability Insurance Or Disability Rider?
It is important to know that there are no insurance policies that are exclusively available for disabled individuals. When someone says short-term insurance or long-term insurance, they mean normal insurance with a disability rider along with it. It is also necessary to know that individuals who already have a disability cannot opt for a disability rider. But if you are someone who doesn’t have a disability but wants to be secure for the future, term insurance with a disability rider is a great option.
Understanding Short Term Disability Insurance
A short-term disability rider offers a limited-time coverage that typically ranges from several weeks to multiple months (temporary disability). Its design aims to shield individuals against temporary disabilities that stop them from working during a certain recovery period. This kind of rider commonly covers a portion of the insured individual's pre-disability pay or salary, offering them monetary support while they recover. Short-term disability insurance targets individuals without an existing condition. To determine an individual's eligibility for coverage, insurance companies usually require them to undergo medical underwriting and have their health examined. People with any disability, even minor ones, may struggle to get short term disability insurance. Any disabilities discovered during the underwriting process could result in insurers rejecting the policy application or excluding disability coverage.
Understanding Long Term Disability Insurance
Long-term disability insurance differs from short term-disability. Long-term disability provides coverage over a longer period for a permanent disability. If your disability continues after your short-term policy ends, this insurance provides income replacement. After a short or long waiting period, depending on the policy terms, most long-term disability insurance policies will kick in. Just like short term disability insurance, long term also demands applicants to pass through the process of medical underwriting. People with pre-existing disabilities may not qualify for long-term disability coverage.
Difference Between Short-Term Disability Rider And Long-Term Disability
The following is the point of difference between short term and long term disability:
| Parameters | Short-Term Disability Insurance | Long-Term Disability Insurance |
| Who should Opt | People with temporary disability | People with disabilities that would last years or a lifetime |
| Waiting Period | 0-14 Days | May take upto several weeks |
| Premium Rates | Lower Premium | Higher Premium |
| Coverage | Several weeks to 2 years Maximum | Several years |
Riders For Disability
Term insurance policies can be enhanced by adding riders that provide extra coverage or address specific needs. There are two riders that assist with disabilities, the disability rider and the waiver of premium rider.
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Disability Rider
Expanding the coverage of your disability insurance policy with a rider can provide protection for disabilities resulting from accidents or illnesses excluded in the standard plan. With this rider, individuals can claim benefits for a broader range of disabilities, providing them with a wider safety net. -
Waiver of Premium (accidental) Rider
The accidental waiver of premium rider allows the policyholder to stop paying premiums on their term insurance in case of a disability. When a qualifying disability occurs. This rider ensures that the policyholder is not burdened with financial difficulties when they cannot work due to being disabled. For example: If you had this rider and in future had a disability due to an accident, you can claim this and you won’t have to pay your future premiums. It is necessary to note that you won’t be getting any money but you won’t have to pay the future premiums. The term policy will continue as it is and the sum assured will remain the same.
The presence of riders can offer great advantages to people with disabilities. While insurance plans targeted towards those with disabilities may not exist, riders allow for personalised coverage options. Individuals can get coverage by including a disability rider in their standard term insurance.
Importance of Opting For Term Insurance With Disability Rider
For people with disabilities having additional coverage by including a disability rider can be very beneficial. A disability rider is important because of the following reasons:
- Financial Security: An extra layer of financial security is guaranteed when you have a Disability rider in case you are unable to work.
- Customizable: Disability riders provide flexibility to customise coverage to your specific requirements.
- Peace Of Mind: Knowing that you are protected by a disability rider brings peace of mind. You can put your mind at ease about.
Plans With Diasbility Rider
- HDFC Life Click 2 Protect Super
- Bajaj Allianz Life Smart Protection Goal
- ICICI Pru iProtect Smart
- Max Life Smart Secure Plus
- IndiaFirst Life Guaranteed Protection Plus Plan
- Aegon Life iTerm Plus Insurance Plan
- Canara HSBC Life iSelect Smart360
- Tata AIA SRS Vitality Protect
- PNB MetLife Mera Term Plus
- Edelweiss Tokio Total Protect Plus
A term plan that offers all-around protection to the policyholder as it protects against 36 critical illnesses, accidental death benefits, etc.
Unique Features
- Life Stage Option
- Multiple Coverage Options
- Increasing Death Benefit
HDFC Life Click 2 Protect Super (Pros)
- Terminal Illness Benefit
- Smart Exit Benefit
- Acceleration Death Benefit
HDFC Life Click 2 Protect Super (Cons)
- 1 Year WP for Suicide
- No Policy Loans
- No Pre-existing Conditions
HDFC Life Click 2 Protect Super (Other Benefits)
- Death Benefit in Instalments
- RP, WOP & 3 Riders
- Additional Cover for Spouse
HDFC Life Click 2 Protect Super (Eligibility Criteria)
- Entry Age -18 Years
- Max Entry Age - 84 years
- Minimum Sum Assured - INR 5,000
- Maximum Maturity Age - 85 years
- Premium Payment Term - RP/SP/LP
The comprehensive plan offers death coverage, accidental death coverage, Cancer cover benefits, and Waiver of Premium on Critical Illness Benefits.
Unique Features
- (ROP) as Maturity Benefit
- Whole Life cover
- Waiver of Premium Benefit
Smart Protection Goal (Pros)
- Critical Illness Benefit
- Accidental Death Benefit (ADB)
- Accidental Total Permanent Disability Benefit
Smart Protection Goal (Cons)
- No Loans Allowed
- 180 Days WP For Critical Illness
- No Rebate for SA above 3 cr
Smart Protection Goal (Other Benefits)
- Suicide Cover After 12 Months
- Female Life Rebate
- High Sum Assured Rebate (HSAR)
Smart Protection Goal (Eligibility Criteria)
- Entry Age -18 Years
- Max Entry Age- 65 Years
- Min Sum Assured - 5 L
- Max Maturity Age - 75 Yrs(ROP)
- Premium Payment Term - RP/SP/LP
This plan offers an optional accidental death benefit of up to 2 crores, extended coverage until age 99, and includes coverage for Covid-19 claims.
Unique Features
- Unlimited Maximum Sum Assured
- Smart Exit Benefit
- Waiver of Premium Benefit
iProtect Smart Term Plan (Pros)
- Major Organ Benefit
- Accelerated Critical Illness Benefit
- Choose your Policy Term
iProtect Smart Term Plan (Cons)
- No Loans Allowed
- Modal Loadings
- No Maturity Benefit
iProtect Smart Term Plan (Other Benefits)
- Brain and Nervous System Benefit
- Heart and Artery Benefit
- Terminal Illness and Disability Enhanced Protection
iProtect Smart Term Plan (Eligibility Criteria)
- Entry Age -18 Years
- Max Entry Age- 65 Years
- Minimum Sum Assured - NA
- Maximum Maturity Age - 75 Years
- Premium Payment Term - RP/SP/LP
Offers financial security and a support system to the policyholder in an emergency. Provides a 5% increment in SA after every anniversary of the policy.
Unique Features
- Life Stage Option
- Multiple Coverage Options
- Increasing Death Benefit
Smart Secure Plus Plan (Pros)
- Terminal Illness Benefit
- Smart Exit Benefit
- Acceleration Death Benefit
Smart Secure Plus Plan (Cons)
- 1 Year WP for Suicide
- No Policy Loans
- No Pre-existing Conditions
Smart Secure Plus Plan (Other Benefits)
- Death Benefit in Instalments
- RP, WOP & 3 Riders
- Additional Cover for Spouse
Smart Secure Plus Plan (Eligibility Criteria)
- Entry Age - 18 Years
- Max Entry Age - 84 years
- Minimum Sum Assured - Adaptable
- Maximum Maturity Age - 85 years
- Premium Payment Term - RP/SP/LP
A pure term plan insurance that offers flexible premium payment options, and innovative coverage features and return of premium option.
Unique Features
- Return of Premiums of maturity
- Coverage till 100 years
- Spouse coverage under same plan
Life Guaranteed Protection Plan (Pros)
- 1 Crore Cover
- 3 Plan Options
- WoP Premium for 40 Critical Illnesses
Life Guaranteed Protection Plan (Cons)
- 1 Year WP For Suicide
- No Rider Benefit
- No Pre-Existing Conditions
Life Guaranteed Protection Plan (Other Benefits)
- Whole Life Cover (Till Age 99)
- WOP Option For Disability
- Adjust SA With Life Stage
Life Guaranteed Protection Plan (Eligibility Criteria)
- Entry Age -18 Years
- Max Entry Age- 65 Years
- Minimum Sum Assured - 50L
- Maximum Maturity Age - 99 yrs
- Premium Payment Term - 5 To 35 Years
A cost-effective and comprehensive online term insurance plan which comes with inbuilt terminal illness benefit.
Unique Features
- Death Benefit Payout
- InstaCover benefit
- High sum assured
A Non-Linked, Non-Participating, Individual, Pure Risk plan that offers 3 plan options with steady income benefits.
Unique Features
- Life cover till 99 years
- Child Care Benefit option
- Income Benefit after 60 years
iSelect Smart360 Term Plan (Pros)
- 3 Plan Options & Spouse Cover
- Accidental Death Benefit
- Accidental Total & Permanent Disability
iSelect Smart360 Term Plan (Cons)
- No Policy Loan Allowed
- No Maturity Benefit
- No Benefit On Revival
iSelect Smart360 Term Plan (Other Benefits)
- Critical & Terminal Illness
- Option To Block Your Premium
- 5% Loyalty Discount
iSelect Smart360 Term Plan (Eligibility Criteria)
- Entry Age -18 Years
- Max Entry Age- 65 Years
- Minimum Sum Assured - 25 L
- Maximum Maturity Age - 81 Yrs
- Premium Payment Term - RP/SP/LP(5&25 Years)
An all-inclusive plan that comes with mental and physical wellness features, discount on premium, early rewards and high sum assured of 2 crores.
Unique Features
- Life Coverage With Term Booster
- Wellness Based Discount
- Rider Sum Assured Boosters
SRS Vitality Protect (Pros)
- 10% Guaranteed Discount
- Wellness Rewards Program
- Guaranteed 1st Year Discount
SRS Vitality Protect (Cons)
- No Plan Conversion Option
- No Maturity Benefit
- Limited Premium Payment Terms
SRS Vitality Protect (Other Benefits)
- 75% SA Terminal Illness Coverage
- Cover Boosters
- Up To 30% Rider Premium Discount
SRS Vitality Protect (Eligibility Criteria)
- Entry Age - 18 years
- Max Entry Age - 65 years
- Minimum Sum Assured - 50 L
- Max Maturity Age 100Yrs
- Premium Payment Term - (5-81 Yrs) LP/RP/SP
Offers financial protection to your loved ones and gives the flexibility to customize the plan according to your needs.
Unique Features
- Tax Benefits
- Joint Life Cover
- Critical illness benefit
Mera Term Plan Plus (Pros)
- Terminal Illness
- Waiver Of Premium on (ATPD)
- Accelerated Critical Illness Benefit
Mera Term Plan Plus (Cons)
- No Policy Discount
- No Policy Loan Allowed
- No Maturity Benefit Without ROP Option
Mera Term Plan Plus (Other Benefits)
- 4 Rider Option
- 10% Step-up Benefit
- Rebate on High Sum Assured
Mera Term Plan Plus (Eligibility Criteria)
- Entry Age -18 Years
- Max Entry Age- 65 Years
- Min Sum Assured - 25L
- Premium Payment Term - SP/RP/LP
- Maturity Age - 99 years (Whole Life)
Edelweiss Tokio Total Protect Plus
Provides all-round financial protection to your family in your absence. It also provides coverage to your better half in the same plan at a little extra cost.
Unique Features
- Return of Premium Option
- Flexible Death Benefit Payment
- Early Exit Benefit
Total Protect Plus (Pros)
- Convertible Premium Paying Term
- 4 Add-On Riders
- Suicide Claim
Total Protect Plus (Cons)
- No Loan Benefit
- Reduced Paid-up Benefit
- No Surrender Benefit For Life Cover
Total Protect Plus (Other Benefits)
- Better Half Benefit
- Critical Illness Rider
- Life-Hospital Cash Benefit Rider
Total Protect Plus (Eligibility Criteria)
- Entry Age - 18 years
- Max Entry Age - 65 years
- Minimum Sum Assured - 25 L
- Maximum Maturity Age - 75 Years
- Premium Payment Term - 5 to 25 Years
Top 10 Term Insurance Plans for Disability Rider With Eligibility
Term Insurance Plans | Entry Age | Maturity Age | Minimum Sum Assured |
| ICICI Pru iProtect Smart | 18 years to 65 years | 75 years | 50 Lakhs |
| HDFC Life Click 2 Protect Super | 18 years to 65 years | 85 years | 50 Lakhs |
| Bajaj Allianz Life Smart Protection Goal | 18 years to 65 years | 75 years | 5 Lakhs |
| Max Life Smart Secure Plus | 18 years to 65 years | 85 years | 20 Lakhs |
| Canara HSBC Life iSelect Smart360 | 18 years to 65 years | 99 years | 50 Lakhs |
| IndiaFirst Life Guaranteed Protection Plus Plan | 18 years to 65 years | 99 years | 50 Lakhs |
| Tata AIA SRS Vitality Protect | 18 years to 65 years | 100 years | 50 Lakhs |
| PNB MetLife Mera Term Plus | 18 years to 60 years | 99 years | 25 Lakhs |
| Edelweiss Tokio Total Protect Plus | 18 years to 55 years | 100 years | 25 Lakhs |
| Aegon Life iTerm Plus Insurance Plan | 18 Years to 65 years | 80 years | 50 Thousand |
Conclusion
Essential knowledge for those seeking financial protection against disabilities includes understanding the variations between short- and long-term disability insurance. While short term-disability insurances cover temporary disabilities, long term-disability insurances offer protection against extensive periods. People who have existing disabilities might encounter difficulties when trying to get disability insurance. In any case, including riders like the disability rider and waiver of premium rider may aid in resolving this matter. These riders enable individuals to tailor their policies for comprehensive coverage and establish financial security against any potential loss of income due to a disability.
