When the elimination period ends, the benefit period begins. The maximum benefit period is determined at the time the policy is applied for and issued; it may be for as short as one or two years of for as long as the insured's entire lifetime.
The benefit period is usually defined as that maximum period of time, beginning at the conclusion of the elimination period for which disability income benefits are payable during the continuation of the insured's disability.
The common benefit periods available on disability income insurance policies are:
to age 65
Just the way that elimination periods on any policy may be split, disability income insurance policies may also be purchased with split benefit periods.
Split benefit periods are simply benefit periods in the same policy that are different for disabilities arising out of a sickness than for disabilities arising out of an accident. It is not unusual to see disability income policies providing a 2-year or 5-year benefit period for disabilities due to sickness and a lifetime benefit period for disabilities due to an accident.
Since there is some evidence that individuals disabled due to an accident often survive longer than those disabled from sickness, there may be justification for arranging benefits in this way.
Disability income insurance policies under which disability benefits are payable for lifetime usually have special limitations that apply to disabilities resulting from sickness. By virtue of these limitations, lifetime benefits for sickness are payable only if the disability due to sickness commences prior to age 50 or 55 (age 45 in certain policies). Disabilities due to sickness that begin after that limiting age on these lifetime benefit policies have their benefit period reduced to age 65.
Benefit periods for specialty disability products such as Disability Overhead Expense and Disability Buyout policies have benefit periods designed to enable those policies to meet the objectives for which they were designed. Overhead Expense policies may have benefit periods of 18 or 24 months while Disability Buyout policies may have lump-sum payouts or periodic payouts over 24 months.