What does a waiting period refer to in insurance?

In insurance, a waiting period refers specifically to the time that must pass before coverage begins. This is particularly common in certain types of insurance policies, such as health insurance or disability insurance. During this waiting period, the insured individual is not eligible to receive benefits or coverage under the policy. For example, if a health insurance policy has a waiting period of 30 days, the insured will not be able to access any of the health services or benefits covered by the insurance until that 30-day period has elapsed.

The significance of the waiting period lies in its role in managing risk for the insurer and ensuring that individuals do not enroll in a policy only when they anticipate needing it imminently. This concept serves to stabilize costs and ensures that claims are made in accordance with the terms of the policy.