Does Disability Insurance Cover COVID-19?

Most disability policies cover you if you’re unable to work due to either an injury or sickness, and COVID-19 certainly qualifies as a sickness. However, you need to read the fine print of your disability insurance policy—especially the part about when benefits kick in—to know for sure what it will cover.

A short-term disability policy should pay benefits if you’re unable to work because of COVID-19. But you’ll need to meet a couple of requirements before you receive payments:

1. You’ll need verification from a medical professional. A “social quarantine,” even if your state or workplace requires it, won’t trigger your benefits. You’ll need verification from a doctor that you have to stay home from work because you contracted COVID-19. Luckily, many companies are allowing people to receive this confirmation from a telehealth visit.
2. You’ll need to wait the number of days stated on your policy before payments begin. Some people with short-term disability policies might not have to wait at all; others might need to wait 15 to 30 days before their policy generates payments. This waiting period (also known as the "elimination period") is typical in disability insurance.

To learn more about disability insurance and how it works, read Disability Insurance 101.

Long-term disability policies typically don’t begin until you’ve been disabled (or sick) and unable to work for at least three months. The long waiting period for long-term policies means that most people with COVID-19 may have fully recovered before their policy pays benefits.

However, the long-term impact of COVID-19 is not yet fully known. Hypothetically, if you contracted COVID-19 and suffered permanent lung damage, a long-term disability policy could cover you if you were unable to work.

Probably not. If you contract COVID-19 and then buy a short-term disability policy, insurance companies can consider your COVID-19 a preexisting condition and exclude it from coverage.

Also, it’s not uncommon for insurance companies to have a probationary period for sickness, which is a waiting period before the policy will pay if you get sick. The probationary period is on top of the elimination period—another waiting period.

In other words, if you buy a short-term disability after you contract COVID-19, it’s likely too late.

Normally yes. But your situation could be different during the pandemic.

Many people receive short-term disability coverage through an employer. But unlike COBRA, which can continue your health insurance after termination, many insurance companies require current employment or minimum hours at a job to continue disability coverage.

However, during the COVID-19 pandemic, many insurance companies are changing eligibility rules. Employees who experienced reduced hours or layoffs may be able to continue disability coverage—as long as they continue to pay premiums.

Contact your insurance company or visit its website for up-to-date information on how your policy is affected by COVID-19.

Disability insurance replaces part of your paychecks if you became disabled or too sick to work. Statistically, you have about a one in four chance of experiencing a disability before retirement.¹

You can usually purchase long-term or short-term disability insurance through your employer or directly from an insurance company. If you’re not sure which type of disability insurance is best for you, read about the differences between long- and short-term disability insurance.

If you’re looking for quick long-term disability coverage, Breeze offers policies online with a fast application process.

We devoted an entire article to this question. See how the COVID-19 pandemic might affect life insurance.