Short-term disability insurance can be valuable to fill income gaps and cover expenses if you can't temporarily earn employment income. In an interview with Insure.com, Life & Health Agent Colleen Corrigan noted that disability insurance should be a key part of a family’s financial planning.

"The purpose of disability coverage is to financially protect yourself and family when illness or injury occurs. Short-term disability coverage is a great idea for a young, growing family where the concern is replacing income in the event of maternity leave, illness or injury not related to a worksite accident."

Colleen added that that short-term policies also come with exclusion periods. An exclusion period is the waiting period before you can begin to receive benefits after becoming eligible for a short-term disability claim.

"Typically, a benefit begins after 0, 7 or 14 days of being declared unable to work. Make sure your family is prepared to cover household expenses for those exclusion periods," she said.

Whether short-term disability is taxable depends on who pays the premiums. Colleen said it also depends on whether someone pays premiums on a pre-tax or post-tax basis.

"Short-term disability benefits are taxable if your employer pays the premiums. Employers receive a tax break when they pay on behalf of employees. It is a deductible business expense," she commented. “If an employee pays, short-term disability benefits may or may not be taxable depending on whether the employee chooses to make either pre- or post-tax payroll elections.”

Corrigan advised when shopping for a policy, it's essential to read the fine print and consider your financial situation carefully.

"It is imperative an individual or family review any exclusions or preexisting condition clauses of a policy when comparing policy options," she said. "Remember that prices are related to the amount of disability income. When shopping, look at your current expenses and project future expenses to make sure you apply for the appropriate dollar amount."

Read the full Insure.com article.

Questions about short-term disability insurance or health insurance coverage? Contact Wallace & Turner at (937) 324-8492 in Springfield, (937) 652-8492 in Urbana, or info@wtins.com.