What does the elimination period of an individual disability policy refer to?

The elimination period in an individual disability policy refers to the time period that must pass after a disability occurs before the insured is eligible to receive benefits. Essentially, it is a waiting period that begins when the disability starts, during which no benefits will be paid. This period serves several purposes, including reducing the cost of the insurance policy and discouraging claims for short-term disabilities that may resolve quickly.

During the elimination period, the policyholder may not receive any financial assistance, so it is important for individuals to understand how long this period lasts when considering their coverage options. When evaluating disability insurance, knowing the length of the elimination period helps individuals plan their finances during potential times of inability to work.