Elimination Period
What Does Elimination Period Mean?
An elimination period refers to the time frame between the onset of an injury or illness and when the insurance company begins providing benefit payments to the policyholder. Typically, elimination periods range from 30 to 365 days, depending on the type of policy. This feature is common in long-term insurance and disability insurance. During the elimination period, the policyholder is solely responsible for covering the expenses associated with treating the illness or injury.
The elimination period is also commonly referred to as a waiting period or qualifying period.
Insuranceopedia Explains Elimination Period
In many insurance policies, companies typically require policyholders to meet the elimination period before any benefits are paid. This elimination period often functions as the deductible within the policy.
Instead of paying a specific monetary amount for required care, the policyholder agrees to cover all care-related expenses for a predetermined number of days. Once this period ends, the insurance company begins paying the policy benefits, provided the policyholder remains injured, ill, or disabled at that time.
Elimination periods generally have an inverse relationship with insurance premiums. For example, shorter elimination periods result in higher premiums, while longer elimination periods lead to lower premiums. This characteristic makes the elimination period comparable to a deductible in an insurance policy.
