Society For Human Resource Management (SHRM) Certified Professional Practice Exam

Short-term disability is typically associated with which type of insurance?

1. Federally regulated

2. Part of a private plan

3. Designed with unpaid leave

4. Made without paperwork

The correct answer is: Part of a private plan

Short-term disability insurance is most commonly part of a private plan. This type of insurance typically provides income replacement for employees who are temporarily unable to work due to a non-work-related injury or illness. Private plans are often set up by employers as part of their benefits package or can be purchased individually by employees. In many cases, short-term disability insurance requires individuals to submit a claim, which includes documentation or verification of the disability, supporting the need for financial assistance during a temporary absence from work. This contrasts with other options, such as federally regulated programs, which are often associated with broader social safety nets (like Social Security). Additionally, the other considerations regarding unpaid leave and the absence of paperwork do not align with the standard processes and requirements of short-term disability plans.