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. Insurance

    Choosing The Best Disability Insurance

    Social Security benefits can be hard to collect. Find out why you need disability insurance to protect your income, and learn how to choose the right policy for you.
  2. 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 ...
  3. Insurance

    The Disability Insurance Policy: Now In English

    Learn to translate this complicated policy so you can rest assured you're covered.
  4. 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.
  5. Insurance

    Group and Individual Disability Insurance: What You Need to Know

    What you need to know about group and individual disability income coverage.
  6. Managing Wealth

    Top 6 Features Of A Great Disability Policy

    Many people consider buying life insurance, but few think to prepare themselves from long-term illness or disability. Find out how to shop for disability insurance and protect yourself from financial ...
  7. 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.
  8. Financial Advisor

    How to Help Clients Who Have Become Disabled

    Disability can strike a client any time. Advisors should make sure clients are adequately insured against this risk and know what benefits are available.
  9. Retirement

    Social Security Disability Benefits vs. Retirement Benefits

    Here's how to know if you should file for Social Security retirement vs. disability benefits.
Frequently Asked Questions
  1. Why Do Most of My Mortgage Payments Start Out as Interest?

    Fear not: Over the life of the mortgage, the portions of interest to principal will change.
  2. What is the difference between secured and unsecured debts?

    The differences between secured and unsecured debt, and how banks buffer risks associated with each type of loan through ...
  3. How Many Times has Warren Buffett Been Married?

    Warren Buffett has been married twice in his life, but the circumstances surrounding the marriages were unconventional.
  4. What's the smallest number of shares of stock that I can buy?

    Many people would say the smallest number of shares an investor can purchase is one, but the real answer is not as straightforward. ...
Trading Center