What Is The Elimination Period Of An Individual Disability Policy?
When an illness or injury prevents you from working, it’s comforting to know you have an individual disability policy to rely upon for a source of income. If you expect the first check to arrive right away, you may be in for a nasty surprise.
Unless you had a disability lawyer from MJ Ellis Disability Law review the policy with you, you may not be aware of its elimination period. It’s the period of time that you must be disabled and out of work before the disability benefits payable under the policy begin. Depending on the elimination period of your policy, it could be several months before you receive your first benefit check.
This article will help you to understand your individual disability policy, its coverage, and how the elimination period affects your benefits. It also addresses options to explore with your disability lawyer to provide financial support while you are unable to work.
What is the elimination period?
There are two types of disability insurance policies: Short term and long-term. Short-term policies generally pay benefits for up to a year when an illness or injury prevents you from working. Long-term disability policies typically cover you for medical conditions lasting for longer than one year. You choose how long the payments continue, but the longer the coverage period, the greater the cost of the policy.
Both types of disability policies include an elimination period. This is the time you must wait from when you become disabled until you begin receiving benefit checks. Some insurance policies refer to the delay in payment as a qualifying or waiting period, but regardless of its name, the result is that you must pay out of your own pocket to meet your financial obligations.
It essentially works like the deductible on your homeowners or auto insurance policies that make you pay toward the damage before you receive anything from the policy.
The length of the elimination period of a disability policy affects how much an insurance company charges for it. Policies with longer elimination periods generally cost less than those that pay benefits sooner. For example, the cost of a policy with a 90-day elimination period would be less than one that begins paying you benefits after 30 days.
When does an elimination period begin?
All insurance policies, including short- and long-term policies, are contracts between you and the insurance company that set out the rights and obligations of each party. The terms of a policy will specify when its elimination period starts.
For example, if you are injured in a motor vehicle accident, you might assume that the qualifying period begins on the date of the accident, but that may not be consistent with the policy terms. Your policy may start the elimination period from the date a doctor declares that you are disabled and unable to work. It may coincide with the date of the crash, but it could be days or weeks later depending on the nature of your injuries.
If you are covered through a disability insurance policy provided by your employer, request a copy and bring it to MJ Ellis Disability Law. Getting a copy should not be difficult because you have a right to it under federal law.
What options do you have during the elimination period?
The purpose of disability insurance is to help you to cope with the financial challenges caused by a loss of income from a medical condition that prevents you from working. An elimination period presents a new challenge by forcing you to find a replacement for the income that you no longer receive at least until the disability benefits begin.
You may wish to consider one or more of the following options to help you get through the qualifying period before disability benefits begin:
- Plan ahead by putting aside enough money in a savings account to meet day-to-day expenses.
- Take a personal or home equity loan from a lending institution.
- Ask family members for help to get you through the elimination period.
- Access money from a retirement plan.
- Apply for benefits through a state or federal disability program.
Many states have disability plans offering benefits to workers who find themselves unable to work because of an injury or illness. However, state plans are short-term and may not offer enough income to meet your financial obligations. A better alternative may be Social Security disability.
There are two SSD programs offering benefits when a medically determinable physical or mental impairment prevents you from engaging in substantial gainful activity for at least one year or results in death. SSD benefits are available through the Supplemental Security Income and Social Security Disability Insurance programs administered by the Social Security Administration.
Let MJ Ellis Disability Law help you
When you need the advice and services of a skilled and experienced disability lawyer to get the disability benefits you need and deserve, contact MJ Ellis Disability Law. Call today to schedule a free consultation.