Also known as: elimination periods · waiting period
Written by attorneys · grounded in primary & secondary sources — see below
A contractual provision in an insurance policy, typically long-term care coverage, that requires the insured to bear the cost of services for an initial period before the insurer begins paying benefits. The policyholder selects the length of the period at issuance, and it operates like a deductible by shifting initial expenses to the insured in exchange for a lower premium.
Eileen Epstein purchased a long-term care policy with a ninety-day elimination period after relocating to a new state. When she required assisted living six months later, the insurer paid nothing for the first ninety days of care. Eileen paid the full daily rate out of pocket during that interval, after which coverage began for subsequent expenses.
Edward Everett obtained long-term care insurance containing a sixty-day elimination period. Upon entering a nursing facility, he covered all costs for the initial sixty days himself. Only after that period expired did the policy begin reimbursing the facility charges at the contracted rate.
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A longer elimination period reduces the insurer's potential payout window and therefore lowers the annual premium the policyholder must pay. The policyholder chooses the period at issuance, trading greater initial out-of-pocket risk for reduced ongoing cost.
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The period starts on the first day the insured receives services that would otherwise be covered under the policy. Benefits become payable only after the chosen number of days has elapsed.
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Most policies fix the elimination period at issuance and do not permit later modification without issuing a new contract. Any change would require underwriting and could alter the premium substantially.
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