Temporary disability insurance (sometimes shortened to TDI) is a kind of free short-term disability insurance offered in California, Hawaii, New Jersey, New York, Puerto Rico, and Rhode Island. It replaces part of your income if you’re injured or sick and can’t work.
Temporary disability insurance usually pays lower benefits than the type of disability insurance that you get through your employer or buy for yourself. It’s unlikely that temporary disability insurance will be enough to cover your regular expenses, so you may still want to have another form of coverage.
How does temporary disability insurance work?
Temporary disability insurance provides limited payments if you’re out of work because of a qualifying injury or illness. It’s free, but only offered in California, Hawaii, New Jersey, New York, Puerto Rico, and Rhode Island.
If you’re eligible for temporary disability, you apply for benefits through your state. Your eligibility usually depends on your employment history and weekly earnings. Generally, you need to have worked at least 14 weeks for 20 hours a week in the last year in order to qualify, though every state has its own rules.
Temporary disability insurance usually covers any physical or mental condition that keeps you from being able to do your regular job, including:
An injury from an accident
Pregnancy or childbirth
Cancer and other serious illnesses
You may even be eligible for temporary disability insurance if you’re unemployed, but it usually depends on your past employment details (meaning the last time you had a job and for how long).
Temporary disability insurance programs by state
If you live in one of the states that has a temporary disability insurance program, we recommend reading your state’s specific eligibility rules, exclusions, payment amounts, and benefit periods since they vary widely.
How much can you get from temporary disability insurance?
Temporary disability insurance likely won’t pay out enough on its own to cover all of your expenses if you’re out of work. Each state program has its own rules for payments, but the maximum benefit allowed is less than $500 a week (sometimes a lot less).
Temporary disability insurance benefits only last up to six months at the most, sometimes longer, depending on the state. If you’re unable to work for longer, you’d have to find another way to cover your expenses.
Temporary disability insurance vs. regular disability insurance
If your state offers temporary disability insurance, you should take advantage of any benefits that you qualify for. That said, having your own long-term disability insurance policy is a better alternative (or supplement) to temporary disability insurance.
Long-term personal disability insurance: Covers absences of a year or more, and can pay out between 60% and 80% of your income while you’re out of work. Coverage generally costs between 1% and 3% of your annual salary.
Short-term disability insurance through your job: Also called group disability insurance, the disability insurance you get as a work benefit usually covers absences of a few months up to a year. It’s either free or paid for mostly by your employer.
What about Social Security benefits?
Social Security disability insurance or SSDI is a federal program that pays out benefits for as long as you’re not able to work, even if you can never work again. While temporary disability insurance is for short-term conditions, SSDI is for injuries that are expected to last at least 12 months or result in your death.
Since TDI covers absences of under 12 months and SSDI is for people who are out of work for at least 12 months, you can apply for both as long as you live in a state with a temporary disability insurance program.
SSDI has its downsides, too. Qualifying for SSDI benefits can be hard — only about one-third of the people who apply are approved. Benefits are also much lower than what you might receive from a regular disability insurance policy. The average SSDI payment changes yearly, but most people receive about $1,700 a month. [1]
