In a Disability Income policy, which clause functions similarly to a deductible?

In a Disability Income policy, the elimination period serves as a waiting period before benefits become payable once a claim is filed. This function aligns closely with how a deductible operates in other insurance policies, as both mechanisms require the insured to bear some initial portion of the risk or loss before the insurer begins to disburse benefits.

During the elimination period, the policyholder typically must wait a specified period of time, such as 30, 60, or 90 days, after becoming disabled before the disability benefits commence. This period is meant to ensure that only those individuals who truly need financial support after a significant delay in earning capacity will receive benefits, thus reducing the likelihood of frivolous claims and helping to manage the insurer's risk and exposure.

The concept of a deductible operates under a similar framework where the insured is responsible for a certain amount of costs before insurance coverage goes into effect, establishing a threshold that must be met for benefits to begin. By requiring the insured to endure an initial waiting period, the elimination period essentially works to limit the insurer's liability during that timeframe, hence its comparison to a deductible.