Elimination Period
The elimination period (also called waiting period) is the time between when a disability or long-term care need begins and when insurance benefits start being paid.
š¬ Video Explanation
Exam Tip
Longer elimination period = lower premium. Common periods: 30, 60, 90, 180 days. Similar concept to deductible.
What is an Elimination Period?
An elimination period is the waiting time after a covered event occurs before insurance benefits begin. Longer elimination periods result in lower premiums because the insurance company pays for a shorter period.
Elimination Period Basics
| Insurance Type | Common Periods |
|---|---|
| Disability | 30, 60, 90, 180 days |
| Long-Term Care | 30, 60, 90 days |
How It Works
- Disability or LTC event occurs
- Elimination period begins
- Policyholder pays own expenses during this time
- After elimination period, benefits begin
Elimination Period Trade-offs
| Longer Period | Shorter Period |
|---|---|
| Lower premiums | Higher premiums |
| More out-of-pocket | Less out-of-pocket |
| Need more savings | Less savings needed |
Choosing an Elimination Period
Consider:
- Available savings and emergency fund
- Employer short-term disability coverage
- Other income sources
- Premium budget
Study This Term In
Related Terms
Disability Insurance
Disability insurance provides income replacement when a policyholder cannot work due to illness or injury, typically paying 60-70% of pre-disability income after an elimination period.
Long-Term Care Insurance
Long-term care insurance is coverage that pays for extended care services not covered by health insurance or Medicare, including nursing home care, assisted living, and in-home care.
Deductible (Health Insurance)
A deductible is the amount a policyholder must pay out-of-pocket before the insurance company begins to pay for covered expenses.
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