PSI Ohio Insurance Practice Exam 2025 – Complete Preparation Guide

The correct term for the waiting period before benefits are payable after a loss is the elimination period. This is a specified length of time after a claim occurs during which no benefits are paid. The purpose of an elimination period is to prevent the insurance company from providing benefits for short-term issues or minor financial setbacks. It allows insurers to limit their exposure to claims and ensures that coverage is used for more significant periods of loss rather than temporary issues.

In the context of insurance policies, the elimination period is common in disability insurance and certain health policies. It establishes a clear timeframe during which the insured must wait following a qualifying event before benefits kick in.

The other terms listed do not accurately describe this specific concept. The effective date refers to when an insurance policy goes into force, while a probationary period often applies to new employees before they receive certain benefits, and the renewal period pertains to the timeframe in which an insurance policy can be renewed or must be renewed to maintain coverage.