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Insurance policy waiting periods explained

Patience is a virtue, or so they say, at least. This notion is founded on the idea that being able to wait in a kindly fashion for the things that we want or need, without anxiety or coming to anger, is an inherently good thing. While being chill enough to show patience in all situations is certainly admirable, and a testament to one’s willpower and pleasant demeanor, there are times in life where patience simply is not warranted.

A prime example of this is a medical emergency. If you are involved in one, you don’t want first responders, nurses, or doctors to lecture you on the importance of patience. You want medical treatment to be given, and given now. Unfortunately some that need urgent medical care, even if they have insurance, may not be able to be covered for their medical costs immediately after securing the policy. This is because of a common feature of many insurance plans called a waiting period. What is a waiting period? And what can you do to avoid them and ensure your insurance coverage? Pacific Prime China provides information to answer these questions and more below.

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Waiting period basics

If you’ve ever purchased insurance before, especially a form of health insurance, then you may already be familiar with waiting periods. For those that are unfamiliar with the term as it applies to insurance, though, we can elaborate a bit here.

A waiting period is an amount of time following the start date of an insurance policy during which no claims can be made against the policy. This means that, while you can receive treatment from a healthcare provider provided they accept you as a patient, you will receive no reimbursement from your insurance for any costs that you incur as long as a waiting period is in effect.

This may seem like an insurance feature that is completely against the interests of the consumer, and, subsequently, a bad deal for anyone but the insurance provider. However, it’s important to understand the importance of waiting periods in maintaining a sustainable insurance ecosystem.

Insurance companies make waiting periods part of their insurance policies largely to prevent abuse of the products that then goes on to hurt their other clients. There are people out there that would attempt to game the insurance system by purchasing a plan knowing full well that they will very shortly have a medical cost coming up. Without waiting periods, insurers would then have to pay out immediately for such costs, which goes against the fundamental framework behind health insurance.

By combining their money and their risk over a long period of time, people in an insurance pool then help each other in good faith. They enter into a sort of pact, where the common understanding is that the healthy people pay into the program in order to take care of the sick people. Sure, a sick person may then get benefits that others in the pool do not, but everyone in the pool has equal access to the insurance funds when they are needed.

The key aspect of the above to remember is that people pay into the pool over time. If a person who is brand new to the pool, and has not contributed nearly as much as others, then immediately becomes a large drain on the pool’s funds, an imbalance is created that can lead to the collapse of the whole system. Clearly, this is an extreme scenario that would not play out in such a pronounced fashion in real life, but protecting existing clients from things like loss of coverage or increased premiums is something that insurers take very seriously. One method insurers have to accomplish this is the utilization of waiting periods.

What to expect from your plan’s waiting periods

Now that you have the skinny on what waiting periods are and why they exist, it will pay to know more about their real world implementation. Below, we lay out some of the common insurance policies that may see waiting periods included within them, and how long one can expect a waiting period on such policies to last for.

  • Health insurance – Whether it’s a basic health insurance plan with only in-patient coverage and zero frills, or a comprehensive ‘Cadillac’ medical insurance plan that covers just about everything, there is a chance that the insurance provider will instate a waiting period. This is likely to last one to two months. 
  • Maternity insurance – If there’s one type of insurance plan out there that is going to include a lengthy waiting period 100% of the time, it’s maternity insurance. Not only that, but the waiting periods on maternity insurance are some of the longest you will see in insurance since insurers want to be sure that maternity insurance is not purchased after a woman is already pregnant. For this reason, the minimum waiting period length you will see is ten months, but most plans feature waiting periods of one or even two years. 
  • Group health insurance – Even employer-provided insurance is not immune from waiting periods. New employees may not be able to get covered by a group medical insurance policy right away, but they’ll be happy to know that they can get covered by the end of their probationary period, as group insurance waiting periods typically last for three months. 
  • Critical illness insurance – This is a different type of health insurance that people get when they would like to receive a large lump sum payout under certain circumstances. It’s not as popular as standard health insurance, but nevertheless can come with a waiting period of one to two months. 
  • Pre-existing condition coverage – Pre-existing conditions are commonly excluded from all kinds of health insurance, but not a lot of people realize that an ailment considered a pre-existing condition one day can then be covered later on down the line if certain criteria are met. Generally, a pre-existing condition waiting period can be revisited by the insurer after a time period of one to five years without occurence of the condition. 
  • Psychiatric, rehabilitation, and palliative care coverage – It’s great to have a plan that covers psychiatric care, but don’t think for a minute that just because it isn’t the standard type of healthcare covered by health insurance that it isn’t also subject to waiting periods. The same goes for rehabilitation and palliative care. For all of these items, you can expect a waiting period of around two months. 
  • Specific disease coverage – If you want to get specific about the diseases that you want covered by your health insurance, insurers are open to including them in your plan. However, in these instances, there may be a lengthier waiting period of six to twelve months included in the plan.

Navigating your way through waiting periods

We want to be clear that the time periods mentioned above are all subject to the terms put forth by your particular insurance provider. Not only can they vary based on provider and plan, but insurers can also get very specific about the waiting periods they include for each different item covered by a plan should they desire.

For this reason, it’s important to dig into the details of any insurance plan that you are considering buying. What’s more, if you can have it looked at by an impartial third party with years of insurance knowledge, such as the helpful insurance advisers at Pacific Prime China, you can get valuable insights into a plan that you may otherwise have overlooked.

If you want to find the best health insurance plan for you available on the market, with the right balance of benefits and value, as well as minimal waiting periods, contact us today! We can look at your existing policy and highlight where improvements can be made, or provide you with a free plan comparison and price quote.

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