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Disability Insurance Elimination Period

Elimination Period - The period of time from the onset of a disability until benefits begin.

The elimination period is a fairly easy choice to make. The elimination period is the period of time between the onset of a disability, and the time you are eligible for benefits. It is best thought of as a deductible period for your policy. For an individual disability insurance policy the industry has made the most attractive offer a 90 day elimination period. They can charge you a higher rate if you choose to go with a shorter elimination period of 30, or 60 days. They will generally give you a price break if you can go longer than 90 days. While the cost of having a shorter elimination period is much higher, you will find that going with a longer elimination period may not save you as much and you should consider the risk you take on. It is my opinion that insurance carriers set it up so that the logical choice is a 90 day elimination. Most options past 90 days are 180, 365, and 720 day elimination periods. It is important that you understand once the elimination period has been satisfied, you receive actual benefit checks at the end of the month. In reality, a 90 day elimination period means you are four months away from getting any claims dollars on a disability insurance claim.

Possible Elimination Periods

There is only one thing to watch out for

There are some policies on the marketplace that require an elimination period be satisfied with a total disability only, or with consecutive days of disability. Be cautious of a contract that does not allow an elimination period to be satisfied with either a residual, or a total disability. Also make sure they have an accumulation period so that you can finish your elimination period in the shortest amount of time. Typically an accumulation period allows 7 months for a three month elimination period (2 times the elimination period + one month).

These are the personal views of the author and do not necessarily reflect the views and opinions of The Guardian Life Insurance Company of America or its subsidiaries and affiliates thereof.