The elimination period is the length 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. In a previous paragraph, we mentioned that individuals must have a total disability for five months in order to request social security benefits. This five-month waiting period (or 150 days) is known as an "Elimination period". The same "waiting period" concept applies when looking at individual disability policies. The chart below shows typical elimination periods:

Elimination Periods (in Days)

Shortest Period Most Popular Periods Longest Periods
30 days 60 to 90 days 120 to 720 days

For an individual disability insurance policy, the industry has typically made the most attractive offer at a 90-day elimination period. Insurance companies will charge you with an extremely higher premium rate if you choose to go with a shorter elimination period of 30, or 60 days. At the same time, insurers will give you a price break if you can accept an elimination period 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 be a wise decision for those individuals that lack adequate savings to cover expenses during the waiting period prior to benefit payments kicking in.

Practice Question:
Julie goes on total disability on January 1, she has a disability policy with a 90-day elimination period. If she files all the required documents with her insurance company and is approved for disability payments, when can she expect her first income benefit payment?

A. Immediately
B. 90 days from January 1
C. 120 days from January 1
D. Upon completion of her physical and 190 days after January 1

Answer: C
Julie would need to complete her 90-day waiting period (elimination period) and then she would receive her first benefit payment in the next 15 to 30 days. The best answer is 120 days from January 1, the common misconception is that a check will be received on the 90th day.


Benefit Amounts

Related Articles
  1. Financial Advisor

    Advising FAs: Explaining Disability Insurance to a Client

    Disability is a very critical type of insurance that most individuals should consider carrying. When it comes to your personal finances, long-term disability can have a devastating effect if ...
  2. Financial Advisor

    Disability and Business Overhead Coverage for the Self-Employed

    What every small business owner or professional needs to know about individual and business overhead disability income insurance plans.
  3. Insurance

    Protecting Your Income With Disability Insurance

    For a high-earning professional, income protection is essential. Here's what to look for in a disability insurance policy.
  4. Insurance

    Group and Individual Disability Insurance: What You Need to Know

    What you need to know about group and individual disability income coverage.
  5. Retirement

    Do You Qualify for Social Security Disability?

    When it comes to qualifying for Social Security Disability Insurance, you either do or you don’t. Here's how to find out if you do and how to apply.
  6. Financial Advisor

    Top 3 Financial Steps to Take on Disability

    Going on disability can be a stressful time financially. Here are 3 steps to take on disability to help protect against significant financial blowback.
  7. Financial Advisor

    Should You Buy A Life Insurance Disability Rider?

    Does it make sense to pay an additional cost for a waiver of premium rider on a life insurance policy?
  8. Financial Advisor

    How to Manage SS Disability & Retirement Benefits

    Advisors with clients who receive disability benefits can carve out a profitable niche by helping them integrate this income into a financial plan.
Frequently Asked Questions
  1. Depreciation Can Shield Taxes, Bolster Cash Flow

    Depreciation can be used as a tax-deductible expense to reduce tax costs, bolstering cash flow
  2. What schools did Warren Buffett attend on his way to getting his science and economics degrees?

    Learn how Warren Buffett became so successful through his attendance at multiple prestigious schools and his real-world experiences.
  3. How many attempts at each CFA exam is a candidate permitted?

    The CFA Institute allows an individual an unlimited amount of attempts at each examination.Although you can attempt the examination ...
  4. What's the average salary of a market research analyst?

    Learn about average stock market analyst salaries in the U.S. and different factors that affect salaries and overall levels ...
Trading Center