Waiting Period
A specified period after a policy's effective date during which certain benefits are not yet payable.
What is Waiting Period?
A waiting period, also called an elimination period, is a defined span of time that must pass after a policy becomes effective — or after a qualifying event occurs — before the insured can receive certain benefits. In disability insurance, the elimination period (commonly 30, 60, 90, or 180 days) is the period of continuous disability that must elapse before income-replacement benefits begin. In health insurance, waiting periods prevent employees who are already sick from immediately accessing benefits under a new employer plan, though the ACA limits waiting periods for employer plans to 90 days. In dental and vision insurance, waiting periods of 6–12 months are common for major services such as crowns or orthodontics.
Example
A financial planner buys a long-term disability policy with a 90-day elimination period and a $8,000-per-month benefit. When she suffers a disabling injury, she must remain continuously disabled for 90 days before the first check arrives. During those 90 days, she relies on emergency savings — illustrating why financial planners commonly recommend maintaining 3–6 months of expenses in liquid savings.
Source: National Association of Insurance Commissioners — Disability Income Insurance