The industry frequently uses the phrases short-term disability insurance elimination period and waiting period as if they mean the same thing. This is a fuzzy way to define the two phrases.
Fuzziness could lead to a poor understanding of how this coverage actually works in practice. However, precise answers can help you avoid common mistakes that lead to lost benefits.
Therefore, we will provide some clarity by making a distinction between the two phrases. The differences are subtle but very important. Pay close attention.
- Elimination period can refer to the time during which any claims are not paid
- Waiting period can refer to the time when claims for specific reasons are not paid
Short-Term Disability Elimination Period
The short-term disability insurance elimination period is best described as the length of time that must elapse after the disability begins until the insured is eligible for any monthly benefits.
Insurance companies often express the elimination period as a set of two numbers. The first number refers accidents and the second to illnesses.
- 0/7 vs 7/7 means benefits kick in immediately for accidents on the first option and after 7 days for the second and after 7 days for illnesses on both
- 14/14 means you must be out of work for two weeks for accidents and sicknesses
- 60/60 means benefits kick in after two months for accidents and illnesses
Both individual and group policies have many elimination options than listed above. Applicants can choose between many combinations when first enrolling in coverage. The choice factors into any quote for new coverage.
Accident Elimination Period
The short-term disability accident elimination period is best described as how long you must be out of work because of any covered accident before benefits begin. Consult your policy outline of coverage for a definition of covered accident. It may be similar to what follows.
“A covered accident occurs after the effective date while the policy is in force, causes a loss of income, and is not listed or excluded by name in the contract.”
The accident elimination period is often shorter because people do not plan or anticipate an injury. They just happen. Therefore, they generate fewer claims. Insurers respond with lower premium price points.
Illness Elimination Period
The short-term disability illness elimination period means the length of time it takes before benefits kick in for any covered sickness. Consult your policy outline of coverage for a definition of covered illness. It may be similar to what follows.
“A covered sickness is an infection, disease or other abnormal medical condition, which is diagnosed after the coverage effective date, causes a loss of income while the policy is in force, and is not specifically excluded.”
The sickness elimination period is often longer because people often plan or anticipate a covered sickness. A family history, brewing symptoms, or planned conception often results in more claims. Insurers respond with higher price points. Applicants then make more affordable choices, which affect the size of their check after filing a claim.
Waiting Period for Short-Term Disability
The waiting period for short-term disability insurance can have a slightly different application. In this case, the term is best described as the length of time it takes before the policy covers specific scenarios.
These specific situations include pre-existing health conditions, and women bearing children.
The short-term disability waiting period for pre-existing health conditions is often 12 months. A preexisting condition means having an illness or injury for which you received medical advice, treatment, or took prescription drugs within the 12 months preceding the coverage effective date.
Many people with pre-existing conditions will not qualify to purchase a new policy. However, those that pass the underwriting criteria may find they are ineligible to file a claim for a stated length of time.
For example, your policy legal language may contain a clause speaking to the waiting period for pre-existing conditions. It may read as follows.
“If you become disabled because of a pre-existing condition, the insurer will not pay for any disability period if it begins during the first 12 months the policy is in force.”
Pregnancy & Childbirth
The short-term disability waiting period for pregnancy ranges from one to two months after the coverage effective date. Each insurance company has different legal language for this specific medical condition.
Women planning to conceive should hold off until this waiting period ends in order to avoid tripping on two possible policy exclusion clauses.
- Giving birth when conception occurred prior to the 30th day after the effective date
- Experiencing normal childbirth within 9 or 10 months after the policy effective date
Many babies deliver well before their due date. One out of eight babies is born prematurely. Be safe and start the coverage at least two months before conception so the normal childbirth occurs after these exclusion clauses expire.