Uncovering the Waiting and Benefit Periods

by Emma

Life insurance essentially covers you and/or your beneficiaries (spouse, children, etc.) in case of unexpected events resulting in you being unable to earn an income. The most common version of a life insurance policy pays a lump sum death benefit to your beneficiaries in case of your death. The money can be used for any living expenses, including credit card debt, mortgage payments, child care, and anything else. This isn’t the only thing that can be covered, however.

Benefit Periods

Types of Life Insurance

There are different kinds of life insurance packages that can cover a variety of situations. The basic types are as follows.

Life Cover: This is the standard plan that pays a lump sum upon your death. The amount paid will depend on your plan, and you may have a whole life or term life insurance. Whole life covers you, as the name suggests, for the rest of your life in exchange for a monthly premium. Term life insurance covers you up until an agreed-upon period of time, and the premiums for term life are often lower. A term insurance policy can make sense if you’re just trying to cover financial goals up to a certain stage in life, such as seeing your children through school.

Total and Permanent Disability (TPD) Cover:

These policies cover you in case of an injury or illness that makes it impossible for you to work. Payouts can essentially go toward whatever you want, but they’re likely to be used for medical expenses and rehabilitation. Premiums will vary depending on if you want only your current job covered or any job related to your experience.

Trauma Insurance:

This covers you if you’re diagnosed with a serious illness or suffer a major injury that isn’t necessarily permanent. Payouts can be used for medical costs, housing changes, or anything else that’s needed. Premiums can increase each year as your likelihood of needing them increases, or you can accept a higher premium at the beginning that never changes.

Income Protection Insurance:

This pays a percentage of your usual income if you’re temporarily unable to work due to illness or injury.

Choosing the right type of policy is just the first step, however. You’ll likely have questions about uncovering the waiting and benefit periods—what do they mean?

Waiting Periods


With any type of insurance, the waiting period is the amount of time an insured person has to wait before they can actually start receiving their benefits. Not all life insurance policies will require a waiting period, and it may be determined by whether or not your plan requires a medical exam before you can be covered. Plans with longer waiting periods (potentially up to two years) tend to have lower premiums.

Income protection insurance may require you to wait a period of time after the injury or illness diagnosis before they start paying. This can be as short as two weeks or as long as 104.

Benefit Periods

Your benefit period is the length of time you’re eligible to file a claim with your insurer and receive payouts and other benefits. If you have permanent life insurance, your beneficiaries will be covered for the rest of your life. With term life insurance, your benefit period ends at the agreed-upon date.

For disability benefits, you’ll be covered until you either return to work or until your agreed-upon benefit period is over. Short-term policies will typically offer benefit periods of one to three months, but you can find long-term plans that can cover you for multiple years or up to a certain age.

Life insurance can be a great way to achieve peace of mind, but it’s important to thoroughly research plans to determine how much life insurance you need when the policy pays and how long you need to wait to benefit.

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