Waiting Period

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Definition

A waiting period is a time for which the insured has to wait for some or all coverage to come into effect. It is the duration from the inception of the policy when the insured does not have the cover assurance even though the policy is purchased and the premium is paid.

Description

Most insurance policies come with a waiting period. During the waiting period, a loss may arise, but the insured cannot file a claim.

Essentially, the waiting period clause comes in the health plans. The insurance policy may have started, but the coverage for specific illnesses begins after some time. Therefore, the claim will not be payable if the insured files the claim for any loss during the waiting period. There are 3 types of the waiting period to include:

A policyholder can also choose to get the annuity benefits immediately under immediate annuity plans. In such a case, the current age of the policyholder is considered as the vesting age of the policy.

• Initial waiting period: The insurance policy comes with a waiting period that varies from 30 to 90 days from the day the policy starts. If the insured falls ill during this period, there will be no claim.

• Pre-existing illness waiting period: Insurance companies issue a list of diseases that will be covered after a specific time. This waiting period could vary from one month to 2 years after the commencement of the policy. For example, all cancer insurance plans come with a waiting period of 180 days.

Example

Ravi bought a health insurance policy today, under which the treatment for the accidental injuries is also covered. But there is a waiting period of 30 days for this cover to be activated. In case Ravi meets an accident in the next 30 days, the treatment cost of the injuries will not be covered by the insurance company because of the waiting period.

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