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Starting a Family? Beware of Private Health Insurance Waiting Period Pitfalls

TeamAckoNov 8, 2024

When you are starting a family, thinking about different areas of life becomes important. Starting from your job to your medical conditions, financial consideration is an important part for every activity. To secure your health, most of you opt for a medi claim or health insurance policy that covers yourself and your family. But, there are some hidden factors which if you do not have an idea, can affect you during your claim process.

One such thing in medical insurance is the waiting period. To make sure you do not pitfall in the waiting period issue, we have brought this article for you. Here we have given you a comprehensive guide on health insurance waiting period and all its related aspects. Keep reading to know more.

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Contents

What is the Health Insurance Waiting Period?
Why Do Health Insurance Plans Have a Waiting Period?
Types Of Health Insurance Waiting Period
Can the Health Insurance Waiting Period be Reduced?
Important Points About Health Insurance Waiting Period
Frequently Asked Questions

What is the Health Insurance Waiting Period?

The waiting period is the time for which you will have to wait before you can claim your health insurance policy. It starts from the first day you buy your insurance plan. You cannot raise a claim under the insurance policy till the waiting period is over. However, during the medical insurance waiting period, under certain policies, the health insurance company will cover part of the insured's pre-existing conditions.

Suppose, a person bought health insurance with a waiting period of 2 years for a specific illness. For 2 years from the commencement of the plan, the person cannot use the health insurance to get treated for that illness.

Why Do Health Insurance Plans Have a Waiting Period?

You may be wondering why health insurance plans have a waiting period. Well, here we have listed some reasons explaining their importance.

Ethics: If health insurance plans had no waiting periods, an ill person could avail of an insurance plan to get treatment and then leave the plan. Thus, the entire cost of treatment would be borne by the insurance company without making any significant income. Such short-term usage of health insurance plans can lead to the collapse of the entire insurance industry.
Thus having waiting periods on health insurance avoids this problem. They ensure that an insured person doesn’t use unethical tactics and stays committed to a plan for the long term.
Risk Planning: Managing risks is at the heart of the insurance business. An insurance company needs to make money to be able to settle insurance claims. Every private health insurance waiting period ensures that companies do not get burdened by high-cost claims soon after enrolment. During the waiting period, the cost of medical expenses is borne by the patient and not the insurance company. This helps the company strike the right balance between risk and reward.
Promoting Responsibility and Plan Stability: Health cover waiting period encourage people to plan for the long term. Equally important is discouraging people from short-sighted decisions. People should enrol for health insurance while they are healthy. Thus it instilled a sense of responsibility in the insurance seekers along with ensuring the stability of health insurance. On the one hand, more people remain committed to the plan and fewer people leave it. Thus the financial stability of the business is maintained.
Fairness and Affordability: Health insurance waiting period prevents preferential treatment towards any class of patients. Without waiting periods, short-term insurance holders would account for a disproportionate amount of claims. The cost for it would have to be borne by long-term policyholders. Thus the waiting period helps to keep health insurance fair and equally accessible to all. It prevents undue discrimination against any class of patients and policyholders.

Types Of Health Insurance Waiting Period

There are several types of health insurance waiting period. Here we have listed some of them below.

Initial Waiting Period: Most health insurance plans have an initial waiting period. During this time, you can make a claim only in case of accidental hospitalisation. No other claims are accepted during this period. It is also called the ‘cooling period’. It usually lasts for 30 days.
Waiting Period For Pre-Existing Diseases: When you sign up for health insurance, you will have to reveal if you have any pre-existing disease or condition such as thyroid, diabetes, hypertension, asthma etc. As per the Insurance Regulatory and Development Authority of India (IRDAI), pre-existing disease means any condition which has been diagnosed 48 months before buying the policy. During the waiting period, you can’t claim insurance benefits related to that illness. It usually varies from 1 to 3 years.
Waiting Period For Specific Diseases: As the name suggests, it refers to the waiting period that insurance companies impose for specific illnesses. Examples of diseases covered by this waiting period include cataract, hernia, haemorrhoids, ENT problems, osteoporosis, pancreatitis etc. The waiting period for specific diseases can vary from 1 to 3 years.
Waiting Period for Critical Illnesses: Health insurance plans for critical illnesses can be availed of usually after 90 days. A person with a critical illness can’t claim insurance benefits during this period.
Waiting Period For Maternity And Newborn Baby: Health insurance policies can also cover the costs of maternity such as prenatal care, postnatal care, childbirth and the child itself. The waiting period can last from 9 months to 3 years. The maternity benefit usually covers the expenses for the first 90 days from the time of delivery.
Waiting Period for Senior Citizen’s Health Insurance: Senior Citizen’s Health Insurance is meant for people over the age of 60. Their waiting period varies from 30 days to 3 years. In some cases, it can be waived by using a co-pay clause.

Can the Health Insurance Waiting Period be Reduced?

Yes, in some cases you can reduce the waiting period of an insurance plan. But to do so you will have to pay a higher premium.

Waiting period is also waived when a group health insurance plan is converted into an individual plan. For example, if you are part of your employer’s group health insurance plan and convert it into an individual health insurance plan, then the waiting period will be waived.

Another way to eliminate waiting periods is to use the co-pay clause. Under a co-pay clause, some of the expense is borne by the insurer while the rest is the policyholder’s responsibility. It allows you to use your insurance policy without going through a waiting period.

Important Points About Health Insurance Waiting Period

Below you can find some points about health insurance waiting period which you should remember before buying health insurance.

Pre-Existing Disease: If a policyholder gets diagnosed with a disease when the waiting period is on, then the disease will not be considered a pre-existing disease. Your health insurer will have to cover it. On the other hand, if a disease exists before the buying of health insurance but is not declared, then it will be considered a pre-existing disease.
Waiting Periods Vary Across Policies and Insurers: Different policies can have different waiting periods. Across companies, similar insurance packages can also have different waiting periods. You should compare different policies provided by insurance companies and read all policy documents to make an informed decision.
Policy Renewal: It is important to remember that the renewal of your insurance does not reset your waiting period. Waiting periods are applicable only during the initial phase of the insurance plan.
Reduction of Waiting Period: Some health insurance plans have the option to reduce the waiting period by using a co-pay clause or paying a higher premium. This can be especially useful for senior citizens. If you want to reduce your waiting period, you can explore such options.

Overall, we have discussed the major aspects of the health insurance waiting period. The waiting period is important for maintaining ethical standards in the insurance industry. It also varies depending on the policy you choose and your circumstances.

In today’s age of escalating health costs, buying health insurance is extremely important. So compare different health insurance plans and read all scheme-related documents to make the best choice for your family.

Frequently Asked Questions

Here you will find some commonly asked questions about health insurance waiting period.

What is the health insurance waiting period?

It is the period during which you cannot raise any claims against your medical insurance policy.

Why do health insurance plans have a waiting period?

Waiting periods help to stop unethical practices by policyholders and maintain professional standards in the insurance industry.

Can the waiting period be reduced?

Yes, in some cases it can be reduced by paying a higher premium or using a co-pay clause.

What is the best time to buy health insurance?

It is best to buy health insurance when you are young and healthy. It will result in lower premiums and the waiting period will likely be over by the time you think of claiming the insurance.

Which illnesses are covered by health insurance?

Different policies cover different illnesses. You will have to read the relevant documents to see which illnesses are covered by a specific insurance.