DEFINITION of 'Successive Periods'

Periods of time that follow one another chronologically, and which are linked together by a common event. Successive periods are used in contracts when defining how long the contract period will last. A year-long contract will be comprised of twelve successive months, with the first month starting on the effective date and the last month ending on the contract anniversary date. The contract signing is considered the common event linking together the twelve months.

BREAKING DOWN 'Successive Periods'

Successive periods are used to denote continuation. Someone who purchases a subscription to a monthly magazine will receive one issue each month for twelve months, with the string of months considered a successive period of time. The common link between the months is the subscription the person purchased. Insurance companies use successive period calculations when providing benefits to a policyholder who visits a hospital for the same injury. Each visit is considered part of a successive period, and each visit is considered part of a continuation of the first injury rather than a new injury.

In disability insurance contracts, knowing how insurance companies calculate the amount of time that benefits will be provided for injuries suffered is important. Insurance contracts provide for a maximum benefit period in which the policyholder can receive benefits for an injury. In the case of a disability contract, the benefits in question are a percentage of the policyholder’s income. The benefit period includes the number of days that benefits are drawn for a single injury or for successive periods of disability. Once the maximum benefit period has been reached no further benefits will be paid.

Insurance companies often require a period of time to pass between benefit periods in order to not consider them successive periods. This is called a “waiting period” or “elimination period”. The amount of time may vary according to the type of injury, with benefits only paid for one injury at a time. During the waiting period the policyholder should be able to work a certain number of hours to be considered part of active employment.

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