Learn how disability insurance works

What Is A Disability Insurance Elimination Period?

Filed under: Disability Insurance — Alston @ 4:23 am April 20, 2011

An elimination period for disability insurance serves the same purpose as a deductible in a health or auto insurance policy. It is a way for the insured to take some of the risk away from the insurance company in exchange for a lower premium.

An elimination period is also known as a waiting period. You will have a period of time that you will need to wait after you have a qualifying disability before you start accruing benefits.

It is important to note that you will not receive disability insurance benefits immediately after your elimination period has been satisfied. If you choose a disability policy that has a three month waiting period, you will probably not receive benefits until after over four months has elapsed.

This is because when you have been disabled for 91 days you will have only “earned” one day’s worth of benefits. After you have been disabled for 120 days or so, you will be able to file a claim for benefits.

(This delay also means that should your disability end and you get back to work, you will receive one or two months of payments after you have recovered.)

You will get the best value by selecting the right elimination period. A policy with a 30-day elimination period will probably be more expensive than the additional coverage is worth. However, a 365 day elimination period can mean that your family will suffer for too long without your income. For most people an elimination period of 60, 90 or 180 days will help them achieve the right balance between cost and benefit.

Disability insurance is one of the most important types of insurance coverage. Be sure to purchase adequate coverage to make sure that your income doesn’t stop if you have an accident or develop health condition that keeps you from working.

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