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. Investing

    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. Trading

    The Disability Insurance Policy: Now In English

    Learn to translate this complicated policy so you can rest assured you're covered.
  3. Markets

    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.
  4. Personal Finance

    Tips for Insuring Your Salary

    Those with high incomes really can’t afford to be without disability insurance. Here's why.
  5. Retirement

    Group and Individual Disability Insurance: What You Need to Know

    What you need to know about group and individual disability income coverage.
  6. 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.
  7. Retirement

    The Cost of Long-Term Care Insurance

    Long-term care insurance has a reputation for being pricey – and it can be. But there’s good news: Prices declined by about 10% from 2015 to 2016 for a couple in their 60s purchasing ...
  8. Retirement

    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.
  9. Retirement

    Step by Step: Applying for Social Security Disability

    Applying for disability benefits is no easy task – but it's well worth your time and effort if a disability is preventing you from earning a living.
  10. Markets

    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?
Trading Center