Employers offer short-term and long-term disability insurance (STD and LTD) to eligible employees. If an employee is away from work for an extended period due to an injury or a maternity leave, he/she will receive partial income through your disability insurance programs.

Short-term disability coverage usually does not begin until an eligible employee has been out of work for five to 10 consecutive days. A typical plan might pay a disabled employee 80 to 100 percent of base salary for the first 10 to 30 days away from work, then 50-75 percent thereafter. STD normally covers a maximum of 180 days.

Long-term disability policies usually pay benefits for a few years, up until the age of 65 in some cases. Coverage usually begins after the short-term disability coverage period ends.

Because the company often pays the entire premium, or pays the premium up to a certain amount of coverage, it is important to add disability insurance when calculating the value of a total compensation package.