Understand how disability insurance waiting periods (30-365 days) affect payouts. Compare elimination periods for short-term vs long-term disability policies and premium impacts.
Almost everyone insures their home and car, but many people overlook insurance coverage for their most important financial asset: income. A disability insurance policy is designed to cover a portion of your salary if you canât work due to injury or illness. But there is usually a waiting period that comes with a disability insurance policy.
The waiting period, or elimination period, is the amount of time that you are unable to work before your coverage kicks in. Once the waiting period has ended, you will receive your benefit in either a lump-sum check or installments to help cover a portion of your expenses. The waiting period is usually 30, 60, 90, 180 or 365 days, depending on the type of disability coverage you have.
There are two basic types of disability coverage: short-term and long-term. With short-term disability coverage, you could see waiting periods as short as 30 days, but you may pay a higher premium for this type of policy. Most short-term policies have a 30- to 90-day waiting period before coverage begins.
Long-term disability waiting periods can range from 90 days to a full year. As with other insurance products, you are not eligible to receive any payments during the waiting period.
People sometimes confuse waiting periods and probationary periods, but thereâs an important distinction. The waiting period, also known as the elimination period, is the number of calendar days since your disability began that must pass before benefits become payable. The probationary period determines when youâre able to file a claim. Most long-term disability insurance policies donât have probationary periods, meaning youâre typically covered as soon as you purchase your policy and could file a claim the next day if necessary.
Learn more about the basics of disability income insurance.
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