How does selecting a longer elimination period typically affect premium?

How does selecting a longer elimination period typically affect premium?

• A. Increases premium
• B. Decreases premium
• C. No effect on premium
• D. Requires medical underwriting

Answer: (B)

The elimination period is the waiting window before disability benefits (or long-term care benefits) start. Choosing a longer elimination period means you’ll go longer without coverage, so the insurer’s risk runs for a shorter overall period. With less risk to the insurer, the premium can be lower. The trade-off is you must handle costs yourself during that longer wait. So, a longer elimination period typically leads to a lower premium.

The elimination period is the waiting window before disability benefits (or long-term care benefits) start. Choosing a longer elimination period means you’ll go longer without coverage, so the insurer’s risk runs for a shorter overall period. With less risk to the insurer, the premium can be lower. The trade-off is you must handle costs yourself during that longer wait. So, a longer elimination period typically leads to a lower premium.