What is a 'waiting period' in health insurance?

In the context of health insurance, a 'waiting period' refers to the specified time frame that must elapse before certain coverages become effective, particularly for specific services or pre-existing conditions. During this period, the insured individual cannot claim benefits for the conditions or services impacted by the waiting period.

This concept is particularly significant for ensuring that applicants do not immediately enroll in insurance solely to seek treatment for conditions they already have. By implementing these waiting periods, insurers aim to mitigate the risk of adverse selection, where those with known health issues sign up for coverage as soon as they anticipate needing care.

For example, if a health insurance policy includes a 6-month waiting period for maternity coverage, this means that any maternity-related services would not be covered unless the event occurs after the waiting period. This approach allows insurers to maintain a more balanced risk pool and keep premium costs manageable for all members.