Short-term disability policies provide income replacement for policyholders between zero and 14 days of disability onset for a maximum of two years, according to AXA. Most long-term disability policies start to pay benefits 90 days after onset of disability and typically provide coverage to age 65.
The time period between disability onset and the start of benefit payments is known as the elimination period, explains licensed disability insurance agent Steven Crawford. Long-term disability policies have elimination periods between 30 and 720 days. Ninety-day elimination periods are the most popular because policies with shorter elimination periods are drastically more expensive. Most policyholders also do not want elimination periods of longer than 90 days because a longer elimination period is too difficult for them to bear financially. When considering elimination periods, keep in mind that disability checks come at the end of the month. Thus, a 90-day elimination period means the policyholder must wait 120 days to receive a check.
In choosing a policy, Mutual of Omaha recommends buyers ask the question "What would happen if I suddenly lost my income due to illness or injury?" The answer to this question helps policy buyers determine the best elimination period and whether they need short-term or long-term disability coverage or both.