What is the purpose of a "waiting period" in health insurance?

The waiting period in health insurance serves the specific function of delaying the start of coverage for certain benefits. This means that even after a policyholder has purchased a health insurance plan, they may not be eligible to use specific benefits until the designated waiting period has elapsed. This approach is often employed for benefits related to pre-existing conditions or for certain procedures, which helps insurance companies manage risk and costs associated with claims.

By implementing a waiting period, insurers can discourage individuals from signing up for coverage only when they anticipate needing expensive treatments or medical services. As a result, waiting periods are a common practice in health insurance plans, ensuring that coverage is more sustainable and that premiums remain manageable for all policyholders.