What is the term for the period before benefits are payable after an insured loss?

The correct term for the period before benefits are payable after an insured loss is the elimination period. This is a specific time frame defined in many insurance policies, particularly in disability insurance, during which the insured must wait after the onset of a qualifying event before they can begin receiving benefits. This period serves multiple purposes, including helping to discourage minor claims and ensuring that the insurance is used for significant risks or losses.

The elimination period is critical because it affects how benefits are accessed and can influence policy costs. For instance, policies with longer elimination periods often have lower premiums since the insurer will not have to pay out benefits for those initial days or weeks following a loss. In the case of disability insurance, this period often ranges from a few days to several months.

Understanding the elimination period is essential for policyholders so that they know when they can expect to receive benefits after becoming disabled or after filing a claim for other insured events. This knowledge helps in financial planning and managing expectations after an incident or loss occurs.