In a Disability Income policy, which clause acts as a deductible?

In a Disability Income policy, the elimination period functions as a waiting period before benefits begin. This period acts similarly to a deductible in that it is the time during which the insured must be disabled and unable to work before they can start receiving benefits.

The purpose of the elimination period is to limit the insurer's exposure to paying benefits for short-term disabilities. By requiring the insured to wait a certain period, the insurance company mitigates the risk of having to pay out for minor or temporary disabilities that are less likely to result in a long-term loss of income.

In the context of disability income insurance, a longer elimination period can result in lower premium costs, as it means the insurer is taking on less risk by delaying the payment of benefits until a significant disability is confirmed to have occurred. Therefore, the elimination period effectively reduces the number of short-term claims made against the policy, functioning like a deductible that protects the insurer from minor or easily recoverable claims.