What Is the Elimination Period For Long-Term Care Insurance?

Health News
Written by A_Smith
March 28, 2022

The “elimination” (or waiting) period refers to the amount of time that must pass after a benefit trigger occurs but before you start receiving payments for services. This is typically filled in different periods of 30, 60, 90, 180, or 365 days. These days are measured in two ways:

Service Day: Only the days you receive care count towards your elimination period. For example, a 90 day elimination period where you receive home care four days a week would spread your elimination period out over 22 weeks (5 months)
Calendar Day: is quite self-explanatory and is typically the more desired choice. On the first day, your doctor deems you unable to do regular daily living activities. In the example of a 90 day elimination period on day 91, your policy will begin paying benefits.

This period starts when you first need long-term care (LTC) and lasts as long as the policy provides. The policy will not pay benefits. If you recover before the elimination period ends, the policy doesn’t pay for expenses you incur. The policy only pays for expenses after the waiting period is over if you continue to need care. Overall, the longer the waiting period, the lower the premium of the long-term care policy. You can lower your premium by choosing another elimination period, but you will also be expected to pay out of pocket.

An elimination period:

During the period, you must cover any costs that you receive.
Most policies allow you to choose an elimination period of 30, 60, or 90 days at a time in which you purchased your policy.
Are determined through a company-sponsored social worker/nurse
The deductible is synonymous with your car insurance, except it is measured in time rather than by dollar amount
Some policies specify that you must pay for your service or receive paid care to satisfy an elimination period adequately.

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Choosing An Elimination Period

The suitable elimination period depends on your current financial situation and how long you can afford to live without the benefit payments. Policyholders choose a benefit amount, length of the waiting period, and length of time the policy will cover.

For instance, policies can provide coverage for one year, three years, or longer. Benefits may begin immediately or follow a 30-day, 90-day, or even six-month elimination period. These choices will directly affect the cost of the policy: a 90-day wait period would be less costly than a 30-day. Long-term disability insurance should pick up where the short-term insurance plan left off.

Together with the elimination policy, these factors determine the cost of your long-term disability policy:

What is a disability? A disability defines whether you are eligible for a claim or not—the type of occupation status of your policy. A true own occupation policy means that you will receive the benefit if you cannot work on your job.
What’s the benefit period? Benefits Period—how long you receive benefit payments— can range from two years until retirement.
What’s the benefit amount? Benefit Amount—how much money you will receive each month from the insurer. The typical benefit amount is about 60% of your pre-tax pay.

The elimination period is the key to determining when your disability benefits start, and it should be a part of your search when protecting your home income– and your family.

Disability Insurance Elimination Period: Everything You Need To Know:

Besides how the elimination period affects your policy cost and when you receive your benefit, there are a few things you need to know:

1. Pre Existing conditions matter

A built-in pre-existing condition is found on disability policies. When you purchase a policy, it immediately goes into underwriting. At this point, the insurer will cover anything that prevents you from working unless they explicitly exclude it.

A general pre-existing exclusion for two years regarding any preexisting condition that is not disclosed will also be included. That is the sole protection from someone who knows they can’t work, buys a policy, lies in their underwriting, and files a claim the first day. It keeps disability insurance affordable for the policyholder and the insurer.

2. Accumulation periods can satisfy elimination periods

Each policy has an accumulation period—usually a year—that can satisfy the elimination period. For example, suppose you have a 90-day elimination period and miss work for 30 days, attempt to go back.

In that case, it is determined you can’t work; the elimination period would effectively be 60 more days since you already had 30 within the last year. The elimination period does not have to be consecutive days.

3. Recurring disabilities and elimination periods

If you file a second claim regarding the same condition where you previously satisfied the elimination period, most providers will waive the elimination period. For example, if someone is diagnosed with cancer, is out of work and on disability for a year, then recovers and goes back to work if cancer returns. They will no longer need to wait another elimination period. They are then immediately eligible for the disability benefit.

However, if you have a different disability, you will need to wait out the elimination period again.

Waiver of Elimination For Home Health Care

Waiver of elimination for home health care means that you wave the elimination period referenced above for home health care, creating a zero-day elimination period.

Data shows that 80% of claims are paid in the home. Adding this feature is most definitely worth it. A few carriers have a built-in feature, while other LTC carriers offer it as an optional rider. This feature may increase your premiums by 15-20% but gives you access to home care sooner when you need it.

How Long Will Benefits Last?

A benefit period will range from two years to a lifetime. Premiums can be kept down by electing coverage for three to four years—longer than the average nursing home stay—instead of a lifetime. When you purchase long-term care insurance, the younger you are, the lower its cost.

Understanding long-term care insurance eligibility can be quite difficult. Each policy has its terms and conditions. Contact a qualified insurance lawyer who will help you understand the complexities of insurance benefits and the elimination period.

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