What is usually a benefit of having a longer Elimination Period?

Choosing a longer elimination period typically results in cheaper premiums for an insurance policy. The elimination period refers to the duration of time the policyholder must wait after a disability or claim arises before benefits are payable. By opting for a longer elimination period, the policyholder assumes more risk during that waiting time, as they will need to cover their own expenses until the benefits kick in. Insurance companies reward this assumption of risk with lower premium rates, as they are less likely to pay out benefits during the longer wait time.

This aligns with the principles of insurance underwriting, where a balance is maintained between the risk the insurer takes on and the premium charged to cover that risk. Therefore, individuals looking for a cost-effective solution can benefit financially by selecting a longer elimination period.