The exclusions and limitations in an income protection insurance policy is a general list of high-risk conditions or activities an insurance carrier will not cover under a disability insurance policy. These conditions/activities are, generally, the same for every person who purchases that policy.
The conditions/activities listed are, generally, seen as either self-inflicted or dangerous enough that the insurer could not reasonably calculate the cost of the risk into the premium.
At LifePreserve, to be completely transparent about our policy, we have included our Exclusions and Limitations from our Income Protection Plan on our FAQ page. This way an applicant knows exactly what she is buying.
What is an elimination period?
An elimination period (EP) is the amount of time between the time you stop working due to an injury or illness and when you are eligible to begin receiving benefits. During this time, you, as the policyholder, are responsible for paying any expenses or care incurred.
For example, let’s say you get sick with mono, and you have a short-term disability insurance policy with a 14-day EP, like ours, you could begin collecting benefits on the 15th day of missed work. But, if you purchase a policy with a 60-day EP and you miss only 30 days of work, then you will pay for your expenses during those 30 days.
Why would I choose a longer elimination period if it covers less?
All things being equal:
- A longer EP, generally, costs less than a policy with a shorter EP.
How Do I Choose If I Should Buy A Policy with a Longer or Shorter Elimination Period?
You’ll have to consider what type of insurance policy fits your lifestyle best.
How long could you go without a paycheck? If you have some money saved or your employer provides you some sick leave, you may be able to cover a short-term disabling event. But if missing one paycheck would put a substantial strain on your finances, a shorter EP may be best.
How much can you afford to spend per month? If you have a limited budget, a more extended elimination period may better serve your purpose because some coverage is always better than no coverage.