What Is a Benefit Period?

The Maximum Amount of Time a Policy Will Pay Benefits

A benefit period is a specified number of months that a policy will be benefits. If the maximum benefit amount is paid each month, the policy benefits will be exhausted after the benefit period. However, if a lesser amount is paid each month, it is possible the benefit period will last longer.

Example: Benefit Period of 48 months with a benefit amount of $5,000. If exactly $5,000 is paid each month, the policy benefits will be exhausted in 48 months. If $4,000 is paid each month, the benefits would not be exhausted for 60 months. The insured essentially has a bucket of money, with a maximum amount to be paid each month. The policy benefits are exhausted when the bucket is empty.

48 months X $5,000 = $240,000

$240,000 ÷ $4,000 = 60 months

Occasionally, you may encounter a policy with a lifetime benefit period. This mean, benefits will continue to pay until the insured recovers and is no longer eligible for benefits or dies. If this option is selected in the software, the box to enter the number of months disappears.