As you may know, I often refer to the "Holy Trinity Of Insurance", which consists of major medical insurance, life insurance and, of course, disability insurance. Many people have a disability insurance (DI) policy through their work, but unfortunately, not enough people who are contract employees, business owners and otherwise "self-employed" people (like myself) have an individual DI plan. That's a discussion for another day.
I often speak to groups of employees when I am enrolling benefits, and when I discuss the DI plan, many of the employees ask what the elimination period is when they see it.
Simply put, the elimination period is the time, usually in days, before the policy actually begins to pay out benefits. There are typically two numbers with a comma between them, such as "0,7" or "7,14". The first number is the number of days that need to elapse before the policy will pay for an accident, while the second number is the waiting period for the benefits to trigger during an illness.
In other words, the elimination period is like a deductible, but measured in time instead of dollars. So a 0,7 elimination period means that the policy will begin to pay benefits on the first day after an accident and the eighth day after a sickness.
Just like your deductible on your car or health insurance, the higher the number, the lower your premium. If you think you can "self-insure" for a month or two, your premiums can be reduced significantly.
When one thinks of a disability, injuries from auto accidents come to mind. But consider that almost 90% of DI claims are for illnesses, like cancer. Treatment can last for months and can easily keep someone from working.
If you have questions about Disability Insurance or other insurance products we offer, feel free to book a short phone appointment with us to discuss. In the meantime, please stay healthy!
Chris Castanes is the president of Surf Financial Brokers, helping people find affordable life, disability, long term care, cancer, accident and other insurance coverages in North Carolina, South Carolina, Virginia, Tennessee and Georgia. He's also is a professional speaker helping sales people be more productive and efficient, and has spoken to professional and civic organizations throughout the Southeast. And please subscribe to this blog!