How to Select an Elimination Period for Your Disability Insurance Policy

What is an Elimination Period?

In disability insurance, the elimination period is also called the waiting period. This is the amount of time you have to wait after you become disabled before your insurance benefits begin. You can think of it as a time-based deductible, instead of a set amount of money. During this time, you won’t get any financial help from your insurance. You will need to use your savings or other income to pay for your living costs.

The length of elimination periods can differ quite a bit based on the policy and insurer. Elimination periods can range quite a bit—from just a few weeks to several months, or even years in some cases. It’s important to understand how elimination periods work. This knowledge helps you make sure you have enough financial support when you cannot earn an income.

Defining the Elimination Period

Understanding disability insurance means getting familiar with concepts like the elimination period and the value of residual disability benefits. The elimination period is the time you have to wait after becoming disabled before your benefits start. Think of it as a kind of deductible, but instead of paying money upfront, you “pay” by waiting it out before your coverage kicks in.

The elimination period is also called the waiting period. Even though it may sound like a small point, it is important for choosing the right disability insurance for you.

Keep in mind that the elimination period begins when your disability starts, not when you apply for benefits. This is important because if you file your claim soon after your disability begins, you may get your benefits quickly once the elimination period is over.

The Purpose of an Elimination Period

The waiting period may feel like a challenge when getting insurance benefits. However, it is important for disability insurance. The main goal of this waiting period is to reduce costs for both the insured and the insurance companies.

By having a waiting period, insurance companies can offer lower premiums, which makes disability insurance more affordable for many people. In simple terms, the longer you’re willing to wait for your benefits to kick in, the less you’ll pay each month for your coverage.

For insurers, this waiting period helps reduce the number of claims for short-term disabilities—those lasting just a few weeks or months—allowing them to focus their resources on supporting people with long-term or permanent disabilities. Ultimately, this balance helps keep disability insurance both sustainable and affordable for everyone.

Why It Matters to Your Disability Coverage

Choosing the right elimination period is important for your disability coverage. A shorter elimination period, like 30 days, means you will get your disability benefits faster if you can’t work. This helps ease financial stress during tough times. However, quicker access can lead to higher premiums.

On the other hand, a longer waiting period, like 90 or 180 days, usually comes with lower monthly premiums. But, you will need to be financially ready for this option. You should have an emergency fund or another source of income to pay for your living expenses during this waiting time.

Think about your financial situation and how much risk you can handle. Determine how long you can go without income. Consider your savings, any support from family, and your monthly expenses. This decision is crucial for picking the right elimination period for your needs.

Shorter Periods May Cost More Than They’re Worth

While getting disability benefits sooner can be tempting, choosing a shorter elimination period usually means higher costs. A 30-day elimination period might look like a good choice to quickly fill income gaps. However, it’s important to think about the long-term costs.

Ask yourself if getting benefits one or two months earlier is worth the extra money you will pay in premiums over time. Choosing a longer elimination period can save you money. This way, you can use those savings for other financial goals or to help your budget.

The trade-off between cost and coverage during the elimination period

When you choose the elimination period for your disability coverage, think of it as finding a balance. You need to look at your need for income replacement and your budget. A shorter elimination period, like 30 or 60 days, lets you access benefits quickly. This is very helpful if you don’t have a lot of savings. However, this option comes with a higher premium because the insurance company will likely pay out sooner.

In contrast, a longer elimination period, such as 90 or 180 days, usually has a lower premium. This means you can enjoy valuable coverage at a cheaper monthly cost. Still, you will need a strong financial backup.

Factors to consider when selecting an elimination period

When crafting your individual disability insurance policy, there are a few key factors to keep in mind. Start by assessing your financial cushion—how long could your savings or other resources cover your essential living expenses if you were without disability benefits?

Next, think about your job and health history. Is your work physically demanding? Do you have any health conditions, like heart disease, that might increase your risk of needing short-term disability? Also, check if your employer offers short-term disability coverage that could bridge the gap during your policy’s elimination period.

Lastly, consider your benefit period—how long your policy will provide payments. If you choose a longer benefit period, you might opt for a longer elimination period, allowing you to maximize the total benefits over time.

90 to 120 Days is Optimal

For most people shopping for disability insurance, an elimination period of 90 to 120 days strikes a good balance between saving money and securing adequate coverage. Many short-term disabilities tend to resolve within this timeframe, so opting for a shorter elimination period might just mean paying higher premiums without significantly changing the benefits you receive.

A 90 to 120-day period also gives you time to assess how serious your short-term disability might be and how long it could last. This is crucial, as not all short-term health issues will require tapping into your disability coverage—especially if you have an emergency fund to cover those first few months.

How to decide which elimination period is best for your individual situation

Choosing the right elimination period for your long-term disability insurance means considering your finances, job role, and your comfort with risk. Start by looking at your savings. Ask yourself, how long could your money cover essential expenses if you were unable to work due to a total disability?

Next, think about your job. Is it physically demanding or risky? Do you have a policy with an “own occupation” definition of disability? These factors might make a shorter elimination period a smarter choice.

Finally, consider your comfort with risk. Do you need the assurance of a safety net, even if it means paying a bit more? If so, opting for a shorter elimination period could align better with your financial plan.

The benefits and drawbacks of a 90-day elimination period

A 90-day waiting period is often considered the best choice for disability insurance. It strikes a good balance by offering solid coverage at a reasonable price for many people. Insurers frequently offer well-priced policies with this waiting period, making it a popular option for those seeking comprehensive coverage without breaking the bank.

One of the biggest advantages is that most short-term disabilities tend to resolve within about 90 days. This means you’re less likely to use your long-term benefits for minor issues, preserving them for when you truly need them. Plus, a 90-day elimination period usually makes the underwriting process smoother, often leading to quicker policy approval with fewer complications.

The benefits and drawbacks of a 120-day elimination period

Selecting a 120-day elimination period for your physician disability insurance policy comes with both benefits and drawbacks. A shorter elimination period means quicker access to benefits in case of disability, providing financial support sooner. This can be crucial for medical professionals facing unexpected health challenges and navigating various disability policies. On the flip side, opting for a shorter period usually results in higher premiums, considering the increased risk for the insurance company. It’s essential to weigh the urgency of receiving benefits against the long-term affordability of the policy. Understanding the trade-off between immediate coverage and cost implications is key when deciding on the right elimination period for your disability insurance policy.

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The Risk of Choosing Lengthy Elimination Periods

Selecting a 120-day elimination period for your physician disability insurance policy comes with both benefits and drawbacks. A shorter elimination period means quicker access to benefits in case of disability, providing financial support sooner. This can be crucial for medical professionals facing unexpected health challenges and navigating various disability policies. On the flip side, opting for a shorter period usually results in higher premiums, considering the increased risk for the insurance company. It’s essential to weigh the urgency of receiving benefits against the long-term affordability of the policy. Understanding the trade-off between immediate coverage and cost implications is key when deciding on the right elimination period for your disability insurance policy.

Advantages and Disadvantages of Short Elimination Periods

Opting for a shorter elimination period, like 30 or 60 days, has its clear benefits—especially if you don’t have much saved up or want to avoid taking on big financial risks. The greatest advantage is that you’ll receive your first disability check sooner, which can significantly ease financial stress and let you concentrate on getting better instead of worrying about the bills.

This option is particularly beneficial for those in physically demanding jobs or with health conditions that might lead to short-term disability. Just keep in mind, though, that getting your benefits faster usually comes with the trade-off of higher premiums.

Pros and Cons of Long Elimination Periods

Choosing a long elimination period, like 180 days or even a year, has one main benefit – lower premiums. If you’re looking to cut down on monthly expenses and have a solid emergency fund or other resources, a longer waiting period could be a smart fit for your budget. It lets you use the money saved on premiums for other goals, like investments or retirement savings, especially as you plan for your later years.

However, having a longer elimination period comes with risks. The biggest risk is the financial strain if your disability lasts longer than the waiting period. If your emergency fund isn’t strong enough, you might run out of savings. This could force you to rely on credit cards and hurt your long-term financial health.

Elimination Periods From on Leading Physician Disability Insurance Companies

Every insurance provider structures its disability insurance policies a bit differently, offering a range of elimination period options to suit various needs and budgets. Comparing these options is key to finding the right coverage that truly fits your specific circumstances. To give you a better idea of what’s available, let’s take a closer look at the elimination periods offered by some of the leading physician disability insurance companies.

• Ameritas’ disability insurance policy for physicians offers elimination period options of 30 days, 60 days, 90 days, 180 days, 365 days, and 730 days.
• Guardian’s disability insurance policy is available with the following elimination periods: 30-day, 60-day, 90-day, 180-day, 360-day, and 720-day.
• MassMutual policies offer elimination periods of 60 days, 90 days, 180 days, one year, and two years.
• Principal allows you to purchase coverage with 30-day, 60-day, 90-day, 180-day, and 365-day elimination periods.
• Standard’s disability coverage comes with 60-day, 90-day, 180-day, and 365-day elimination periods.

Ameritas

Ameritas is a trusted name in the doctor disability insurance market, sponsored by the American Medical Association (AMA). They provide a variety of coverage options with flexible policy features to meet different needs. One highlight of Ameritas is their variety of elimination periods. They have different choices from 30 days to 730 days. This shows that they understand doctors have different needs and finances.

If you want a shorter waiting period for peace of mind, or a longer elimination period to save on premiums, Ameritas has what you need. Their agents work closely with doctors to understand their needs. This way, you get personalized help to make the right choice about your coverage.

Besides the flexible elimination periods, Ameritas has strong financial ratings and a good reputation for quick claims processing. So, if you ever need to file a disability claim, you can trust Ameritas to be there for you. They’ll work to make the process as smooth and quick as possible, easing financial stress during challenging times. Read our full Ameritas review here.

Guardian

Guardian Life Insurance Company of America is a trusted name in the insurance field. They focus on high-quality disability insurance policies. These policies aim to protect your most valuable asset: your ability to earn an income. Guardian knows that a disability can happen at any time. When it does, it can affect your money and your long-term goals.

Their disability insurance plans show this understanding. They offer customization options, including flexible elimination periods to fit your needs and budget. Guardian’s elimination periods start at 30 days and go up to 720 days. This means you can adjust your coverage to match your financial situation and comfort level with risk.

If you want to protect your income sooner or if you are looking for more affordable premiums, Guardian has a policy for you, including a future increase option. Read our full Guardian review here.

MassMutual

MassMutual is a trusted name in financial services, offering strong disability insurance options for professionals, including doctors. Their policies are designed to protect your income if a disability prevents you from working.

MassMutual provides a variety of elimination periods ranging from 30 to 730 days, allowing you to choose a waiting period that suits your financial needs and premium preferences. Whether you’re looking for quicker coverage or aiming for lower premiums, MassMutual has options to suit your needs.

With strong financial ratings and a reputation for reliable service, MassMutual makes the claims process simple and stress-free.Read our full MassMutual review here.

Principal

Principal Financial Group is a well-known name in the financial services world. They offer a wide range of products, including disability insurance, to help people secure their financial futures. When it comes to disability insurance, Principal is notable for providing customized solutions. They cater to each person’s unique occupational information needs and financial goals.

Their disability insurance policies come with a good variety of elimination periods, including a probationary period. You can choose from 30 days to 365 days. This lets you adjust your coverage based on how much risk you are comfortable with and how prepared you feel financially. Principal knows that everyone is different. Their approach to disability insurance shows this. They offer flexible policy features and competitive pricing.

Whether you want the best protection with a shorter elimination period or if you aim to save costs while still getting good coverage, Principal’s disability insurance options can give you peace of mind. Read our full Principal review here.

The Standard

The Standard Insurance Company is well-known in the group disability insurance market. They offer a great range of disability insurance options as an employee benefit. They work with many professional associations to give members complete coverage. The Standard knows that earning an income is very important for professionals. Their insurance policies are designed to help protect against the money problems that can happen due to a disability.

One great thing about The Standard’s disability insurance is the choice of elimination periods. This means you can pick what works best for your financial situation. The options usually start at 60 days and can go up to 365 days. This gives you the chance to balance cost and the protection you need.

Whether you want individual coverage or a group plan from your professional association, The Standard offers quality service, good prices, and great benefits. They are a strong choice to think about for your financial safety when facing unexpected challenges. Read our full review of The Standard here.

 

Key Takeaways

Selecting the right elimination period for your disability insurance is very important. It helps you get the financial support you need if you can’t work due to illness or injury. The elimination period is how long you must wait before you start receiving disability insurance benefits.
If you opt for a shorter elimination period, like 30 or 60 days, you’ll get access to your benefits more quickly. However, this convenience usually comes with higher monthly premiums. On the flip side, choosing a longer waiting period—such as 90 or 180 days—can reduce your monthly costs, but you’ll need to be financially ready to manage without benefits for a longer time.
Take a close look at your financial situation, your comfort with risk, and the likelihood of facing a disability. It is also beneficial to consult with an independent physician disability insurance broker like LeverageRx. We can show you all of your options and help you select the right elimination period, making sure you have the most suitable insurance coverage to protect your finances when it matters most. To get started, request your quotes today.