What does the elimination period refer to in the context of disability insurance?

The elimination period in the context of disability insurance refers to the time before benefits begin after a disability occurs. This is essentially a waiting period that the insured must endure before they can start receiving their disability benefits. During this time, the insured is not eligible for any payout, and they must rely on their savings or other income sources.

This period is critical because it helps the insurer manage risk and minimize costs, as it discourages claims for short-term disabilities that may resolve quickly. The duration of the elimination period can vary based on the policy and can range from a few days to several months. Understanding this concept is essential for individuals considering disability insurance, as it affects how quickly they can receive financial support in the event of a qualifying disability.