In elderly care, as the elimination period becomes shorter, what happens to the premium?

In elderly care insurance, the elimination period refers to the time that must pass before benefits kick in after a policyholder files a claim. When the elimination period is made shorter, it means that the insurer is committing to start paying out benefits more quickly.

As a result, the level of risk for the insurance company increases. A shorter elimination period often indicates that the insurer will pay claims sooner, which can lead to more frequent and potentially higher payouts. Therefore, to balance this increased risk, the insurance company adjusts the premiums upward.

In this context, a shorter elimination period typically results in higher premiums to compensate for the increased likelihood of claims being made more immediately. This rationale applies broadly across various types of health insurance, particularly in long-term care situations where timing can significantly impact both provider and insurer financial risks.