What are Elimination Periods and What Can it Do for You

What are Elimination Periods and What Can it Do for You

Also known as the waiting or qualifying period, elimination period is the length of time between when an injury or illness begins and receiving benefit payments from an insurer. During this period, policyholders must pay all costs of care out of pocket for the services and can be thought of as a deductible.

Generally, the shorter the elimination period, the more expensive the policy is. Most insurance providers offer attractive rates for waiting periods of 90 days. However, a policy with more than 90 days may not save you much for additional risk you take even though it is cheaper. In some long term care policy, it requires the waiting period to consist of consecutive days of disability. This simply means if your qualifying period was 90 days, you would need to be in a hospital or disabled for 90 consecutive days before any coverage begins.

Elimination periods come in different provisions which are mainly based on the kind of policy purchased and the state where the policyholder resides. Since its terms and provisions vary it is very crucial to understand how the waiting period works. A way to determine the waiting period that is most convenient for you is to figure out learn of its average cost per day most likely.

It also pays to know that the waiting period is treated from one person to the other. It depends on the assets you want protect and the price that you target for monthly premiums. It is advisable to determine the cost of nursing homes in your area for you to be able to choose the best time of removal.

Policyholders can choose a variety of waiting periods ranging from 0 days to 30, 60, 90 or 180 or as high as 730 days or longer. A policy with a shorter elimination period will cost more than a policy with a longer period. Insurance providers calculate this duration by calendar day method or days of service method. With a calendar day method, waiting period begins on the day you begin to need care and every day counts, even if you do not receive care on every subsequent day thereafter. Every day of the week is counted in determining the qualifying period, regardless of whether the policyholder has received services in those days. A policy under this method also allows family members, colleagues or friends to assist within the duration.

While in days of service method, waiting period must be a day that care was actually received. In some instances, it can be quite difficult to understand this type of method particularly if the policy doesn't have a zero-day, calendar-day, or "one-day equals seven" waiting period.

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