The elimination period in a long-term care insurance (LTCI) policy is also known as the policy deductible. While it's similar to the deductible used in major medical insurance policies, one significant difference is this: instead of a set dollar amount that you will initially pay for your own care expenses, there is a specified number of days for which you will be responsible for your own care.

What are My Options?
Very few carriers offer a zero-day elimination period. Generally, the most typical choices are 30, 60, 90, 180 and 365 days, although these periods can vary between carriers. Selecting a longer elimination period helps keep the cost of LTCI extremely low, but it means that you will be responsible for expenses incurred during that time. For this reason, choosing an elimination period of 180 or 365 days is most often made by those who have significant assets of their own. Even if you choose a 90-day elimination period, the amount of funds put at risk is miniscule when compared to the asset protection afforded by the policy's total pool of benefits.

What's a Reasonable Elimination Period?
Some financial experts recommend setting it as low as possible, even at zero if it's an option. The shorter the elimination period, the less likely it is that you will have to pay out when you begin receiving care.

However, low elimination periods can have a dramatic effect on the premiums that you pay throughout the life of the policy. Some form of compromise is usually necessary for the sake of affordability.

In deciding on the elimination period, many policyholders think of insurance as a way to avoid suffering catastrophic financial losses rather than insuring against every possible expense. Most people are able to accept a small portion of the risk, which can be an economical and reasonable choice.

The Smartest Route
Of course, what's right for most people may not be right for you. One of the most important factors to consider is the cost of the most expensive care that you may have to receive—which is most often facility care. When you have a good idea of the daily costs for facility care in your area (or where you expect to be), multiply the costs by the various elimination period choices. This will help you determine the amount that you feel is affordable. When you've chosen the elimination period that best fits your situation, earmark those funds for your care, and allow them to grow so that they keeps pace with inflation—at the very least.