Definition
Waiting Period
A waiting period is the time after a health policy starts during which claims for specified conditions or treatments are not payable.
Indian health policies typically impose several waiting periods: an initial waiting period (commonly 30 days) for most illnesses except accidents, a specified-disease waiting period (often two years) for ailments like cataract or hernia, and a longer pre-existing disease waiting period.
Waiting periods protect insurers against adverse selection, where people buy cover only after symptoms appear. Maintaining continuous cover and using portability preserves the time already served. Once a waiting period lapses, claims for those conditions become payable like any other.
Related terms
- Pre-Existing Disease (PED)A pre-existing disease is any condition, ailment or injury diagnosed or treated before buying a health policy, typically subject to a waiting period.
- Adverse SelectionAdverse selection is the tendency for higher-risk individuals to seek insurance more eagerly than lower-risk ones, skewing the risk pool.
Plain-English explainer from The Dispatch Investors Encyclopedia. General information, not financial advice.