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Waiting Period in Health Insurance

Health is like money, we never have a true idea of its value until we lose it and health insurance helps us secure this value by paying for medical and surgical expenses incurred by the insured. Health insurance can reimburse the insured for expenses incurred from illness or injury, or pay the care provider directly. It is often included in employer benefit packages as a means of enticing quality employees. The cost of health insurance premiums is deductible to the payer, and benefits received are tax-free.

Why is Health Insurance important?

The commonest form of health insurance policies in India cover the expenses incurred on Hospitalization, though a variety of products are now available which offer a range of health covers, depending on the need and choice of the insured. The health insurer usually provides either direct payment to hospital (cashless facility) or reimburses the expenses associated with illnesses and injuries or disburses a fixed benefit on occurrence of an illness. The type and amount of health care costs that will be covered by the health plan are specified in advance.

Medical contingencies have a way of putting a strain on our finances. The rising cost of medical treatments and the rising incidence of diseases spell a warning for our finances. In these situations a health insurance plan becomes necessary. But does your health plan cover every medical contingency suffered by you?

No, it does not. Every health insurance plan has a list of exclusions. This list states the instances of medical contingencies which are not covered by the plan. Common exclusions include hospitalization due to suicide or self-inflicted injuries, HIV/AIDS, participation in hazardous sports and activities, acts of criminal nature, etc. Buying a health insurance policy doesn’t mean you’ll get coverage from day one, there is clause associated with it called Waiting Period Clause

What is waiting period?

So if you inherit any disease from your Family or you are suffering from any ailment since childhood, your health insurance policy does not cover that. Diabetes, high blood pressure, thyroid, etc., these are called pre-existing diseases. For assessing these diseases health insurance companies underwrites a medical examination and based on that the company decides whether the proposal is acceptable or not. If the proposal is accepted then a waiting is prescribed to the policyholder. There are 2 types of waiting period:

  1. Regular waiting period: Normally such waiting period range from 1 year to 4 years and depends upon the nature the health plan taken by policyholder.
  2. Specific waiting period: Certain listed ailments fall under this period like sinusitis, tonsillitis, cataract, hernia, piles and fistulas, etc.
  3. Maternity benefits waiting period: There are few health insurance companies which provide maternity benefits under the policy, but with a waiting period ranging from 9 months to 36 months.
  4. General health insurance waiting period is one month for every policy except for accidental cases.
  5. There is a 90 days waiting period for infants or new born babies.

You will have to serve a waiting period when you start a new private health insurance policy or increase your level of cover. A waiting period protects members of the fund by ensuring that individuals aren’t able to make a large claim shortly after joining and then cancelling their membership. This kind of behavior would result in increased premiums for all members.

The waiting period under your health insurance policy is affected by various factors like the type of health insurance (group health insurance, individual health insurance, family floater health insurance, etc.), medical history of the insured and the age of the buyer.

What can be done in-case of pre-existing illness?

This clause is to avoid moral hazard (wrong intention of a person to claim benefit) and planned claims from the policyholder.

Looking at the skyrocketing price of the surgery, the person may buy a health insurance policy (if it has no waiting period) without disclosing the disease and get cover for the surgery just after the purchase.

So to avoid such unethical practices, the waiting period clause is conceptualized in a health insurance plan.

  • Honesty is the best policy- It is important to declare your pre-existing illness to avail the benefits of claim. If your pre-existing illness is not declared, the claim would be rejected and your policy would become invalid or void. It will be eligible for after the waiting period and will cover your other medical expenses.
  • Deep dive into the plans- A detailed evaluation of different health plans can give you a policy with less tenure of waiting period as different plans come with different waiting period.
  • Buy early- When you early then you have the benefit of availing the claim at the time of need when the disease usually occurs which is old age.

It is prudent to read the fine print of the policy waiting periods of a health insurance policy and choose the policy with lesser waiting period. It will allow you to avail the benefits of your health insurance policy as soon as possible instead of bearing medical expenses from your own pocket due to longer waiting period clause.

Important points related to the waiting period under health insurance:

  • There is no waiting period in a group health insurance policy
  • The waiting period clause should be read thoroughly before you make a buying decision
  • If you are diagnosed with a specific disease for the first time during the waiting period, then it will not be considered as pre-existing disease
  • Read the fine print carefully regarding waiting period clause to avoid any surprises at the claim’s stage

When buying health insurance make sure you are fully aware of any waiting period you may have to serve. There is usually no waiting period if you need hospital or medical treatment because of an accident that happens after you join the fund.

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