Elimination Period for Disability Insurance
The elimination period is how long a policyholder must wait after they are initially unable to work before they can receive benefits from their disability insurance. Typical elimination periods range from a week to a month for short-term policies and 30 to 180 days for long-term policies.
- Written By Jennifer Schell
Jennifer Schell is a professional writer focused on demystifying annuities and other financial topics including banking, financial advising and insurance. She is proud to be a member of the National Association for Fixed Annuities (NAFA) as well as the National Association of Insurance and Financial Advisors (NAIFA).Read More
- Edited BySavannah Hanson
Senior Financial Editor
Savannah Hanson is an accomplished writer, editor and content marketer. She joined Annuity.org as a financial editor in 2021 and uses her passion for educating readers on complex topics to guide visitors toward the path of financial literacy.Read More
- Financially Reviewed ByDaniel J. Adams, MBA, CFP®, CLU®
Daniel J. Adams, MBA, CFP®, CLU®
Certified Financial Planner™ Professional and Chartered Life Underwriter®
As the founder of CEG Life Insurance Services, Daniel J. Adams has extensive experience with life and health insurance products. Daniel assists clients in building a secure financial future as a Certified Financial Planner™ professional and independent insurance agent. He also trains new agents and advises other financial professionals.Read More
- Updated: March 15, 2023
- 6 min read time
- This page features 5 Cited Research Articles
- Edited By
- The elimination period of a disability policy is how long you must wait after being disabled before you can receive benefits.
- Long-term disability policies tend to have longer elimination periods than short-term disability insurance.
- The longer your elimination period is, the lower your premium will be, but your finances will have to weather the burden of an extended period without pay.
What Is the Elimination Period of an Individual Disability Policy?
The elimination period of an individual disability policy refers to how long a policyholder must wait after initially being unable to work, due to disability, before they can start receiving disability benefits. The elimination period begins when the illness or injury occurs and ends after a certain number of days determined when you purchase a policy.
Disability insurance replaces lost income when you become sick or injured and can no longer work. There are two types of disability insurance: short-term and long-term. Short-term disability insurance covers conditions that are likely to resolve in a few weeks or months, while long-term disability insurance can provide coverage for multiple years.
Because the benefits last for a shorter time, the elimination period of a short-term policy is also shorter. You won’t have to wait as long to receive benefits. A typical elimination period for a short-term policy might be as little as a week or up to a month.
If you have a long-term disability policy, you may have to wait multiple months after you stop working due to a disability before you can receive benefits. For long-term disability policies, the elimination period can be between 30 and 365 days.
In addition to the monthly benefit amount and the benefit payment period, determining an appropriate elimination period is an essential part of getting the right disability insurance policy.
How the Elimination Period Impacts Your Premium
When you purchase a disability insurance policy, you’ll be able to choose the elimination period, which will affect how much you pay in premiums. Generally, a shorter elimination period will result in a higher premium, while a longer elimination period will lower the premium cost.
“The elimination period and disability insurance premiums are inversely proportional to each other. Long elimination periods mean lower premiums. This signifies that there is less likelihood that you will need to claim benefits, and hence the company’s exposure to risk is lower,” said Rhett Stubbendeck, Chartered Property and Casualty Underwriter (CPCU) and CEO of LeverageRx, Inc.
This means that if you need disability insurance but may not be able to afford expensive premiums, one option is to choose a policy with a longer elimination period. Keep in mind that this exposes you to losing income for a longer time before your benefits kick in, so consider how well you’ll weather the loss in income for an extended period.
If you have a robust emergency fund, a longer elimination period can be worthwhile. For example, if you have six months of income saved (as many financial experts recommend) you can opt for a long-term disability policy with a 180-day elimination period. You’ll likely pay a lower premium for your coverage, and you will know that you’ll have enough savings to fall back on while you wait for benefits to kick in.
However, a long elimination period may not be worth it for many people. If your finances can’t endure the hardship of waiting 90 or 180 days without income, there’s little point in signing up for a policy with such a long waiting period.
The elimination period and disability insurance premiums are inversely proportional to each other. Long elimination periods mean lower premiums. This signifies that there is less likelihood that you will need to claim benefits, and hence the company's exposure to risk is lower.
How To Choose a Disability Insurance Elimination Period
When choosing disability insurance, especially long-term coverage, the elimination period is a key component of the policy to consider. To decide which elimination period is best for you, consider factors like your monthly income and budget, your savings and whether others in your household are dependent on your income.
“It is important to weigh the cost of a longer elimination period against the risk of not having benefits available right away in case you become ill or injured. Consider what type of financial situation you would be in if you had to wait several months before receiving benefits and decide whether it makes sense to pay more in premiums to have a shorter waiting period,” said Linda Chavez, Founder and CEO of Seniors Life Insurance Finder.
- 30 Days
- Thirty days is the shortest elimination period you’re likely to find for a long-term disability insurance policy, but also probably the most expensive. This elimination period might be best for someone who doesn’t have much savings, or for small-business owners with employees who rely on their income.
- 60 Days
- A 60-day elimination period is less common than 30 or 90 days. But it can provide a happy medium between the cheaper but less convenient 90-day period and the more expensive but faster 30-day period.
- 90 Days
- Ninety days is the most common elimination period for long-term disability insurance. Policies with this period are likely to be pretty affordable.
- 180 Days
- A six-month elimination period could be a good option for those who want to reduce their premiums but can’t afford to be out of income for more than half the year.
- 365 Days
- A year-long elimination period will lower your premiums considerably, but be sure you can afford to go without income for that long should you need to file a claim.
- 720 Days
- You’ll likely find policies with 720-day elimination periods to have the lowest premiums, but an elimination period this long won’t make sense for many people.
Be sure to understand your financial situation when choosing an elimination period.
“It is important to weigh the cost of a longer elimination period against the risk of not having benefits available right away in case you become ill or injured. Consider what type of financial situation you would be in if you had to wait several months before receiving benefits and decide whether it makes sense to pay more in premiums to have a shorter waiting period.”
Elimination Period vs. Probationary Period
The elimination period is different from the probationary period, which is how long you must wait after purchasing an insurance policy before you can file a claim for the insurance benefits.
Disability insurance companies include a probationary period on policies to help prevent adverse selection, or taking on risks that are less favorable to the insurance company. In this case, that can mean a person taking out a disability insurance policy if they believe they are getting sick but before they get an official diagnosis, then immediately filing a claim and starting the benefits process.
Probationary periods tend to be shorter than elimination periods, usually between two weeks and a month. Not all disability insurers require a probationary period, and for some policies, the probationary period only applies to claims related to illness. In the event of an unexpected injury, you may still be able to file a claim not long after purchasing your policy.
Connect With a Financial Advisor Instantly
Our free tool can help you find an advisor who serves your needs. Get matched with a financial advisor who fits your unique criteria. Once you’ve been matched, consult for free with no obligation.
5 Cited Research Articles
Annuity.org writers adhere to strict sourcing guidelines and use only credible sources of information, including authoritative financial publications, academic organizations, peer-reviewed journals, highly regarded nonprofit organizations, government reports, court records and interviews with qualified experts. You can read more about our commitment to accuracy, fairness and transparency in our editorial guidelines.
- Masterson, L. (2022, November 28). What Is Long-Term Disability Insurance? Retrieved from https://www.insurance.com/other-insurance/long-term-disability-insurance
- Ryburn, D. (2022, November 7). Long-Term vs. Short-Term Disability Benefits: What’s the Difference? Retrieved from https://clea.org/blog/long-term-vs-short-term-disability-benefits-whats-the-difference/
- Special Needs Alliance. (2012, March). Private Disability Insurance. Retrieved from https://www.specialneedsalliance.org/the-voice/private-disability-insurance-2/
- Florida School of Insurance. (n.d.). Probationary Period vs. Elimination Period. Retrieved from https://floridaschool.com/eschool/servlet/CourseZipServlet/154/?section_uid=20469
- Olmsted, B. (n.d.). Elimination Period. Retrieved from https://www.disabilityquotes.com/articles/view/elimination-period-disability-insurance
Your web browser is no longer supported by Microsoft. Update your browser for more security, speed and compatibility.
If you are interested in learning more about buying or selling annuities, call us at 866-528-4784