Few parts of a short-term disability policy are as important as the waiting period; this could be even more important than either the benefit amount or the benefit period to the insured because the satisfaction of the waiting period may determine if the insured even receives the benefits or not.
The waiting period— or elimination period, as it is also commonly referred to– is the amount of time after the onset of an injury or sickness that the insured must wait before receiving benefits. It is the period of time directly before the benefit period– the period in which benefits are to be received by the insured individual.
There are waiting periods for both accident and illness claims and both of these options are chosen by the proposed insured when designing the policy.
Accident Waiting Period
The waiting period for accident claims can be as little as 0 days, meaning they would pay immediately. The proposed insured can pick longer waiting periods and the amount of time chosen for the elimination period will affect the amount of premium paid by the insured. A shorter amount of time before being paid after a claim means more money paid in premiums.
Illness Waiting Period
The waiting period for illness claims can be as little as seven days and issues such as colds and the flu are generally not covered by short-term disability policies. Longer periods can be chosen such as 14, 30, 60, or 90 days for the elimination period for the illness waiting period.
Why Choose Different Waiting Periods?
Again, the waiting period can starkly determine the premium amount. Longer waiting periods can mean smaller premiums. However, this shirks some of the risk to the insured as some short-term disabilities may resolve themselves before the waiting period is satisfied, meaning that the insured has both missed work and not received benefits that he or she would otherwise be eligible for with a shorter waiting period.
Disclaimer: This information does not constitute financial advice. For specific information for short-term disability policy plans and features, consult your local insurance agent.