AD Banker Comprehensive Practice Exam

Which type of disability coverage would generally have the longest waiting period before benefits start?

1. Short-term disability policies

2. Permanent disability policies

3. Long-term disability policies

4. Workers' Compensation policies

The correct answer is: Long-term disability policies

Long-term disability policies typically have the longest waiting period before benefits commence because they are designed to provide ongoing financial support for disabilities that last for an extended period, often beyond six months. This waiting period, also known as an elimination period, varies by policy but is generally longer than that of short-term policies, which may begin benefits after only a few days or weeks. Short-term disability policies are meant to cover temporary disabilities, therefore their waiting periods are considerably shorter to provide prompt assistance. Permanent disability policies address disabilities that are ongoing and might not have a waiting period in the same sense as other policies, rather they provide benefits once the disability is acknowledged. Workers' Compensation policies focus on job-related injuries and often offer immediate benefits without a waiting period after the injury occurs. Thus, in contrast to these options, long-term disability policies are structured for serious and prolonged health issues necessitating a longer waiting period for benefits to ensure that only those who are truly unable to work in the long term receive ongoing support.