What term describes the waiting period before disability benefits are effective?

The term that describes the waiting period before disability benefits become effective is known as the Elimination Period. This is a specified duration in which an insured individual must wait after experiencing a disability before they start receiving benefits from their disability insurance policy. The purpose of the elimination period is to ensure that benefits are only paid to those who are genuinely unable to work for a sustained period and to help prevent claims for short-term disabilities.

Typically, the length of the elimination period can vary based on the specific policy, but it’s a standard feature in most disability insurance contracts. A longer elimination period could result in lower premium costs, while a shorter one might increase the insurance cost.

Other terms like "Grace Period," "Probationary Period," and "Activation Period" have different meanings in insurance contexts. A Grace Period usually refers to the time an insured has to make a premium payment before coverage is affected, while a Probationary Period often applies to health insurance and signifies the time before coverage becomes effective for pre-existing conditions. Activation Period is not a standard term in the context of disability insurance. Thus, the Elimination Period best fits the description of the waiting period for disability benefits.