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Also known as the “waiting period,” the elimination period is the length of time before you start receiving benefits. It’s up to you to decide how long you want this period to last.
The elimination period is the amount of time you’ll need to wait before your disability benefits start paying out. During this time, you’ll have to cover your own living and medical expenses.
Think of it like a car insurance deductible. But instead of having to pay a certain amount of money before your insurer steps in, it’s measured by time.
Once the elimination period has passed, you’ll receive your first monthly check from your insurer — assuming you meet their definition of partial or total disability.
When you apply for a disability policy, you’ll be given a choice of elimination periods. The most common elimination period is 90 days — which means your benefits won’t be paid out for three months — but the options available to you will depend on your insurer and policy.
These are some of the key features of the elimination period:
Yes. If you choose a shorter elimination period, you’ll pay more for coverage. And if you go with a longer one, you could save on your premium — but just know that you’ll need to pay for any living or medical expenses out of pocket during that time.
It depends how long you can support yourself without a paycheck. Remember, the shorter the elimination period, the more you’ll pay in premiums.
The key is choosing an elimination period that aligns with the premium you can afford. To do the math, consider how much money you have in savings, and whether or not you’ll have new financial obligations in the future, like a mortgage or baby.
Let’s say you have enough savings to cover a year’s worth of living expenses. You could cut down your disability premium by choosing a longer elimination period, like 180 or 365 days. If your spouse is the breadwinner and could support you both, you could stretch out the elimination period longer.
But if you don’t have an emergency fund to fall back on, you might want a shorter waiting period.
Choosing an elimination period is one of the key decisions you’ll make when buying a disability policy. Depending on the type of coverage you have, the elimination period ranges from seven to 720 days, and the length you choose has a direct impact on your premiums.
Explore your options by comparing disability insurance companies.
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