Waiting period

What it means

A waiting period is the stretch at the start of a policy during which the insurer pays nothing for an otherwise covered event, or cuts the indemnity sharply. The contract runs and the premium is paid, but cover has not started.

It is not the same as policy exclusions. An exclusion applies for the whole life of the contract and removes an event permanently, while a waiting period attaches only to the beginning and disappears once it runs out.

A waiting period should also be kept apart from a deductible. A deductible reduces every payout by the agreed share for the whole life of the contract, whereas a waiting period reduces nothing and only delays the start of cover. It protects the insurer against people who would buy cover once they already know about a problem, which is why premium for the period is not refunded.

How it works in practice

The length is set by the conditions of the individual insurance contract, not by statute, and it varies with the risk. The longest ones sit on pregnancy and childbirth, on dental treatment and on slow-onset illness.

Accidents usually fall outside the waiting period while illness falls inside it, and short products such as travel insurance do not use one at all. Switching insurer restarts the clock even after years of continuous cover.

When setting up group cover for employees, the insurer can be asked to waive the waiting period, especially when moving from another insurer without a gap in cover. We advise clients to have that condition written into the contract rather than rely on a verbal promise from the insurance broker.

What to watch out for

Employee schemes are re-placed with a new insurer and the old contract is terminated on the same day. If the new contract opens with a waiting period, illness in that window is covered by neither insurer and the employer pays for the treatment.

Policy conditions often treat an illness that showed up during the waiting period as pre-existing and exclude it even after the period ends, later treatment included. Anyone who also leaves known health problems out of the questionnaire risks the insurer withdrawing from the contract at the first insured event.