Elimination period for Disability Insurance is the amount of time that passes between the event of suffering a disabling injury or illness, and the time when benefits begin to be paid to the disabled person. The elimination period is chosen as a feature when taking out a Disability Insurance policy. The shorter the elimination period, the higher the premium usually runs.
Specialist, LTCi, DI, Annuities, Life, Designs In Life, LLC, Utah
The elimination period is chosen at the time of application for the DI policy and represents a kind of "time deductible" that must be fulfilled before a claim is paid. The clock starts ticking when the carrier is informed in writing by a medical professional that the insured person has suffered a debilitating accident, developed a medical condition, or contracted a serious illness that is likely to last longer than the elimination period chosen. The first day of fulfillment of the elimination period typically begins at the date-of-onset of the debilitating event, although that actual date-of-onset is subject to the decision of the insurance company after reviewing medical records.
Claims, i.e. a check for the maximum monthly benefit for income replacement, would usually not arrive until 30 days after the completion of the elimination period. For example, say the injured or sick insured has a 90-day elimination period. The income replacement check would arrive 30 days later, or 120 days from the date-of-onset. In the meantime, the insured would be responsible for paying bills during that four month period. So, serious discussion needs to take place at application time about how long of an elimination period should be applied for understanding that reality. The insured should make sure that a liquid asset account be available at all times for such expenses, and/or a short-term DI policy should be in place, and/or a sufficient amount of sick leave and vacation be saved up, or a combination of all those accommodations.
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Claims, i.e. a check for the maximum monthly benefit for income replacement, would usually not arrive until 30 days after the completion of the elimination period. For example, say the injured or sick insured has a 90-day elimination period. The income replacement check would arrive 30 days later, or 120 days from the date-of-onset. In the meantime, the insured would be responsible for paying bills during that four month period. So, serious discussion needs to take place at application time about how long of an elimination period should be applied for understanding that reality. The insured should make sure that a liquid asset account be available at all times for such expenses, and/or a short-term DI policy should be in place, and/or a sufficient amount of sick leave and vacation be saved up, or a combination of all those accommodations.