If a policy has a longer elimination period, what is likely the effect on the premium?

A policy with a longer elimination period typically results in a lower premium. The elimination period is the time during which the insured must wait before benefits are paid out after a qualifying event, such as an illness or injury. By choosing a longer elimination period, the insured is essentially agreeing to absorb more of the initial costs before the insurance starts paying.

This lower risk for the insurer is reflected in the premium, making it more affordable. The insurer will not have to pay benefits for the duration of the elimination period, which can range from a few days to several months, depending on the policy. Thus, the longer the waiting period, the less likely the insurer will need to make a payout right away, leading to reduced financial exposure for the insurance company. Consequently, this reduction in risk is passed on to the policyholder in the form of lower premiums.