In the context of health insurance, the waiting period refers to the time that must elapse before ailments listed in the policy can be covered. This write-up describes three types of waiting periods. These are typically applicable for individual health insurance. Insurers often waive these off for group health insurance. However, group plans may sometimes have these waiting periods as a way to reduce costs.
Types of waiting periods
There are three different types of waiting periods: (i) commencement of health insurance plan; (ii) pre-existing disease coverage, and (iii) maternity coverage.
Initial waiting period
The waiting period immediately following the commencement of a health insurance is also called initial waiting period. There is rarely any initial waiting period in a group health insurance policy. In some affinity or non-employer-employee group insurance, insurers may include a wating period. However, most individual health insurance policies typically have a waiting period of 30 to 90 days after the purchase of the plan. This usually depends on the insurance company’s product design.
Pre-existing disease coverage
In individual health insurance plans, how pre-existing disease coverage works is that the insured has to declare their pre-existing disease/ailment (diabetes, thyroid, high blood pressure, etc.) before buying a plan. Based on this, the insurance company will decide whether it can offer individual health insurance cover.
When the insurer extends cover for such diseases/ailments, it will usually impose a waiting period of two to four years. This means that the insured can claim related medical expenses only after completing this waiting period with the insurer.
Certain ailments such as ENT disorders, osteoporosis, hernia, and others only have a waiting period of one or two years. And policyholders can ask insurers to waive off this waiting period.
A big advantage of group health insurance is that groups can insurers to waive off waiting periods for pre-existing conditions. This would mean that the insurer covers all diseases with immediate effect.
The maternity coverage waiting period is quite standard for most insurance companies. It ranges from nine to 48 months. As in the case of other waiting periods, groups can ask insurers to waive off the maternity coverage waiting period for a group health insurance policy. This would mean that the insured persons get maternity coverage from day one of the policy.
Case study: No cover for costs incurred in initial waiting period
Ranjan Desai (30) joined MKM Engineering Company in 2013 as a senior engineer. Along with various perks, his company also offered group health insurance. Ranjan also had a personal health insurance that he had recently bought.
Within a week of joining MKM Engineering, Ranjan received a diagnosis of kidney stones. Following this diagnosis, his doctor advised Ranjan to undergo a Lithotripsy. Accordingly, his boss granted him ten days leave for the procedure and for recovery.
Ranjan was confident that his individual health insurance policy would cover his medical expenses. Therefore, without reading the policy document or checking the facts, he had the procedure. Thereafter, he paid all the bills and approached his individual health insurance company for reimbursement.
However, he got a major shock when the insurer rejected the claim. They pointed out that they would not accept his claim as he hadn’t completed the initial waiting period. There was a waiting period of 30 days in the individual health insurance policy. This meant that the insurer would not cover any medical expenses incurred in the first month after buying the insurance. Fortunately, Ranjan also had a group health insurance from his company where all waiting periods were waived off. This group cover paid for his claim.