What is an Elimination Period in the context of disability insurance?

An Elimination Period in the context of disability insurance refers to the waiting period before benefits are paid to the insured. This is a critical component of disability policies, as it establishes the time frame during which the policyholder must be disabled before they begin receiving benefits. The purpose of the Elimination Period is to discourage frivolous claims and reduce policy costs, as it ensures that only those who are genuinely unable to work for a specified time can access benefits.

Typically, this period can range from a few days to several months, and choosing a longer Elimination Period can result in lower premium costs for the insured. Understanding the Elimination Period is essential for policyholders as it affects their financial planning during a time of disability and the timing of when they can expect to receive financial support from their insurance coverage.