What it is:
An election period is a window of time during which a person can take a certain action. In the bond world, the refers to the period of time a holder of an extendible or retractable bond can extend or retract a bond. In the personal finance world, an election period often refers to the period of time during which a person can sign up for Medicare.
How it works/Example:
Let's say John Doe purchases an extendible bond pays a 5% coupon and matures in 2025 but has an to extend to 2030. The bond gives John Doe from January 1, 2024, to January 31, 2024, to elect to extend the bond (he can either get his principal back in 2025 or continue receiving coupon payments until 2030). He must inform Company XYZ of his decision during this election period.
In another example, let's say John Doe turns 65 in about six months. At that age, he qualify for . However, he must sign up for it, and if he wants to purchase any supplemental coverage, he must do so during the election window, which is generally the three months before he turns 65.