South Carolina Life and Health Practice Exam

A disability elimination period is best described as a?

1. Waiting period

2. Time deductible

3. Coverage exclusion

4. Benefit termination

The correct answer is: Time deductible

A disability elimination period is best described as a waiting period that an insured must go through before they begin receiving benefits from a disability insurance policy after a claim is made. This period acts as a way to ensure that the insurance company does not pay out for short-term disabilities and helps to mitigate the risk of frequent small claims. The term "time deductible" is particularly fitting here as it indicates that the insured must endure a specified amount of time without benefits in order to be eligible for assistance once the elimination period is satisfied. It emphasizes the time duration during which the insured must be disabled before benefits kick in, much like how a deductible requires the insured to pay a certain amount out-of-pocket before their insurance coverage starts to contribute. Understanding the elimination period is crucial for anyone considering disability insurance, as it significantly affects when and how benefits are received.