What is the “Elimination Period” Within Disability Income Insurance?

The elimination period (or waiting period) is the period of time after disability begins until the disability income policy begins paying disability benefits. An individual disability income policy typically will offer the purchaser a choice of several elimination periods at the time the policy is purchased. And, as might be expected, the longer is the elimination period that the insured selects, the lower is the premium the insured must pay for the coverage.

The effect of the policy premium is one item to consider in selecting an elimination period. However, individuals should also factor in the amount of assets they have available to meet living expenses during a period of disability. If assets are sufficient to pay living expenses for sixty days but not necessarily ninety days, then sixty days may be the best elimination period to select. While companies may offer elimination periods from thirty days up to as long as two years, the most commonly selected period is ninety days.

Reproduced with permission.  Copyright The National Underwriter Co. Division of ALM

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