Elimination Periods
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Disability Insurance Elimination Periods


The elimination period is a fairly easy choice to make. The elimination period is the period of time between the onset of a disability, and the time you are eligible for benefits. It is best thought of as a deductible period for your policy. For an individual disability insurance policy the industry has made the most attractive offer a 90 day elimination period. They will charge you with an extremely high rate if you choose to go with a shorter elimination period of 30, or 60 days. They will give you a price break if you can go longer than 90 days.

While the cost of having a shorter elimination period is much higher, you will find that going with a longer elimination period does not save you much money at all for the risk you take on. It is my opinion that insurance carriers set it up so that the logical choice is a 90 day elimination. Most options past 90 days are 180, 365, and 720 day elimination periods. It is important that you understand once the elimination period has been satisfied, you receive actual benefit checks at the end of the month. In reality, a 90 day elimination period means you are four months away from getting any claims dollars on a disability insurance claim.

There are some policies on the marketplace that require an elimination period be satisfied with a total disability only, or with consecutive days of disability. Never own a contract that does not allow an elimination period to be satisfied with either a residual, or a total disability. Also make sure they have an accumulation period so that you can finish your elimination period in the shortest amount of time. Typically an accumulation period allows 7 months for a three month elimination period (2 times the elimination period + one month).

After struggling through elimination periods of three to six months before becoming eligible for long-term disability benefits, almost all of these very sick and financially challenged patients have been forced to wage prolonged and costly legal battles with insurance companies which have broken their promise to provide financial security in the unlikely event of a life-challenging, career-shattering illness. Although many insurance companies are involved, these claimants' experiences are strikingly similar.

Many claims are repeatedly delayed another four to six months, with some waiting a year or longer for payments to begin. Others received no benefits at all. Insurers often insists many claimants are "mentally ill," limiting their benefits to 24 months; Many are told they had "no objective evidence of disability" and paid nothing; Some are persuaded to accept small settlements in exchange for dropping their claims. Only a few of those who applied are currently receiving benefits for physical illnesses, yet even these fortunate claimants report being subjected to repeated medical evaluations, surveillance, harassment and the abiding fear of being cut off.

Claimants who succeed in the battle for benefits tend to be savvy, articulate and persistent individuals with the resources to obtain sophisticated medical evidence and aggressive attorneys. Poorer, older, less-educated and extremely ill claimants seldom fare as well. The sickest and least privileged among us may be easily brought down by insurance company employees who find them fair game for harassment, deception and intimidation. Their stories are the most disturbing I have encountered.
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