What two pieces of information must you know to advise a client on the length of the elimination period?

To effectively advise a client on the length of the elimination period for a long-term care policy or disability insurance, understanding their savings and expenses is crucial. The elimination period is the duration that a policyholder must wait after a qualifying event before benefits begin to pay. Clients need to have sufficient savings to cover living expenses during this period, as insurance payouts won’t commence until the elimination period concludes.

By assessing the client’s savings, you can determine whether they have enough financial resources to sustain themselves during the waiting period. Additionally, evaluating their expenses helps you understand their financial obligations, which can influence how long they may want to set the elimination period. A shorter elimination period can lead to higher premiums, while a longer period might be more cost-effective but requires adequate financial planning to cover expenses in the interim.

Understanding these factors allows you to provide tailored advice that aligns with the client's financial situation and needs, ensuring they are adequately prepared for any potential gaps in income while awaiting insurance benefits.