Short-Term vs. Long-Term Disability Insurance in Maryland Guide

Short-term disability insurance in Maryland: what it actually covers

Short-term disability insurance in Maryland does one thing: it replaces a portion of your paycheck when a health issue keeps you out of work for weeks or a few months. Most people do not think about it until they need it, and by then it is too late to buy it. Whether you are recovering from surgery, dealing with a difficult pregnancy, or sidelined by an accident, losing your income for even four to six weeks can put serious pressure on a household budget in a state where the cost of living in areas like Ellicott City, Columbia, or Catonsville runs well above the national average.

This post covers how short-term disability compares to long-term disability, what each one covers, how Maryland's rules affect your options, and how to figure out which type (or combination) makes sense for your situation.

How short-term disability works

Short-term disability (STD) policies typically kick in after a short waiting period called the elimination period , usually between 7 and 14 days. After that waiting period ends, the policy pays a weekly or biweekly benefit equal to roughly 50 to 70 percent of your pre-disability income , for a benefit period that usually runs between 13 and 26 weeks (three to six months).

A practical example: say you earn $5,000 per month working as a project manager in Howard County. You have a short-term disability policy with a 14-day elimination period and a 60 percent benefit. After two weeks of recovery from surgery, the policy starts paying you $3,000 per month until you return to work or exhaust the benefit period. Without that coverage, you would be living off savings or going into debt.

What triggers a short-term disability claim?

Common covered conditions include:

• Post-surgical recovery , orthopedic procedures, cardiac surgery, back surgery
• Pregnancy and maternity leave , typically covers recovery from childbirth, usually 6 to 8 weeks for a vaginal birth and 8 to 10 weeks for a cesarean section
• Serious illness , cancer treatment, hospitalization for infections, mental health crises depending on the policy
• Injury from an accident , non-work-related injuries (workplace injuries fall under workers' compensation)

That last point matters. If you are injured on the job , Maryland's workers' compensation system handles wage replacement, not a private disability policy. Short-term disability fills the gap for everything that happens off the clock. You can read more about how the two programs interact in our guide to workers' comp requirements in Maryland.

How long-term disability works

Long-term disability (LTD) insurance picks up where short-term disability leaves off. It is designed for situations where a condition lasts months or years, not weeks. The elimination period for LTD is typically 90 to 180 days , which is why many financial planners recommend having both types: STD carries you through the first several months, then LTD takes over if recovery continues.

LTD benefit periods vary widely. Some policies pay for two to five years; others pay until age 65. The benefit amount is typically 50 to 60 percent of pre-disability income , with some high-income professionals purchasing additional coverage to protect a larger share of their earnings.

Own-occupation vs. any-occupation definitions

One of the most important distinctions in any disability policy is how it defines "disabled." There are two main definitions:

• Own-occupation , you are considered disabled if you cannot perform the duties of your specific job, even if you could theoretically work in another field. This is the more generous definition and is especially important for physicians, attorneys, dentists, and skilled tradespeople.
• Any-occupation , you are considered disabled only if you cannot work in any occupation at all. This is a much harder standard to meet and is more common in group employer plans.

The difference can have enormous financial consequences. A surgeon who loses the fine motor skills to operate may qualify under own-occupation even if they could theoretically work a desk job. Under an any-occupation definition, they might be denied benefits. When shopping for an individual policy, this language deserves as much attention as the benefit amount itself.

Maryland-specific considerations

Maryland does not have a state-mandated short-term disability insurance program. States like California, New Jersey, and New York require employers to carry temporary disability insurance for employees. Maryland has no such requirement, which means your access to disability coverage depends entirely on what your employer offers voluntarily or what you purchase on your own.

Employer group plans vs. individual policies

Many Maryland employers, particularly larger ones in healthcare, federal contracting, and financial services, offer group disability plans as part of a benefits package. These plans are often cheaper than individual policies and do not require individual medical underwriting. The downside is that group coverage stays with the job. If you leave, change careers, or your employer drops the plan, you lose that coverage.

An individual disability policy purchased through an independent agent is portable . It follows you from job to job, and the terms cannot change as long as you keep paying your premium. For self-employed residents in Howard County, Carroll County, or anywhere in Maryland without access to a group plan, an individual policy is often the only option for real income protection.

Social Security Disability Insurance (SSDI) is not a substitute

Some people assume SSDI will catch them if they become disabled. In reality, SSDI has an extremely high denial rate (about 65 to 70 percent of initial applications are rejected), takes months to years to process, and only applies to conditions expected to last at least 12 months or result in death. It also pays a relatively modest benefit: the average SSDI payment in 2024 was around $1,537 per month , which covers basic living expenses for most Maryland households only if paired with other income. Private disability insurance is not a luxury for people who depend on their paycheck.

Short-term vs. long-term: side-by-side comparison

• Elimination period: Short-term: 7 to 14 days. Long-term: 90 to 180 days.
• Benefit duration: Short-term: 13 to 26 weeks. Long-term: 2 years to age 65, depending on the policy.
• Benefit amount: Short-term: typically 60 to 70 percent of income. Long-term: typically 50 to 60 percent of income.
• Best for: Short-term: surgery recovery, pregnancy, temporary illness. Long-term: cancer, chronic illness, permanent injury, mental health conditions lasting more than six months.
• Cost: Short-term premiums tend to be lower than LTD premiums, but both depend on your age, health, occupation, income, and the specific policy terms.
• Portability: Group plans are tied to employment. Individual plans travel with you regardless of where you work.

How much disability coverage do you actually need?

A common starting point is to cover at least 60 percent of your gross income , but that is a floor, not a final answer. Your real number depends on your fixed monthly obligations: mortgage or rent, car payments, health insurance premiums, utilities, and food. For a homeowner in Ellicott City or Columbia with a $2,500 monthly mortgage payment and other household expenses, the math gets real quickly.

A few questions worth thinking through:

• How long could you last on savings alone? If your emergency fund covers three months of expenses, that shapes how long an elimination period you can afford to ride out before coverage kicks in.
• Does your employer already provide short-term or long-term disability? If so, what is the benefit percentage, and does it use an own-occupation or any-occupation definition? Knowing the gaps in your group coverage helps determine whether you need a supplemental individual policy.
• Are you self-employed? Freelancers, contractors, and small business owners in Maryland have no employer-sponsored safety net and should treat individual disability coverage as non-negotiable.

If you want to understand how disability insurance fits alongside other types of individual coverage, our page on individual disability insurance is a good place to explore your options in more detail.

Disability insurance and individual health insurance in Maryland

Disability insurance and health insurance solve different problems. Health insurance pays the bills your injury or illness generates: hospital stays, procedures, prescriptions. Disability insurance replaces the income you lose while you cannot work. A serious diagnosis without disability coverage means your medical costs may be covered, but your mortgage still goes unpaid. You genuinely need both.

For Maryland residents shopping for both, our resource on individual health insurance in Maryland covers what to look for in ACA marketplace plans, short-term health plans, and how carrier options differ across the state. Coordinating both types of coverage is one of the most useful things an independent agent can help you do.

Work with a local independent agent who knows Maryland

J.E. Schenk and Associates is an independent insurance agency serving residents across Howard County, Baltimore County, Carroll County, and surrounding Maryland communities. As an independent agency, we compare coverage options across multiple carriers rather than being limited to one company's products. That means we can find a disability policy that fits your income, your occupation, and your existing benefits.

Disability insurance feels optional right up until it is not. The average disability claim lasts about 31 months , according to industry data. Three months of income loss is a setback. Thirty-one months without a paycheck is a financial crisis. Getting the right coverage in place before something happens is the only time the decision is truly in your hands.

If you want to talk through your options for short-term or long-term disability insurance in Maryland, give us a call at (410) 465-7474 or reach out through our contact page. We are happy to review what you already have, identify gaps, and help you compare your choices without any pressure.