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Posted by Royal Sundaram on 07 Sep 2020
A health insurance policy is a contract between an individual and the insurance company. The contract binds the insurance company to provide medical coverage to the policyholder. In turn, the individual pays a pre-decided premium to the insurance company. The premium amount is decided based on different factors, such as age, medical history, and the income of the individual.
Understanding Health Insurance
While buying health insurance may not be mandatory, it is a crucial financial investment that can save people from the mental and financial stress of a medical emergency. One can buy health insurance for themselves or their complete family. Individuals can also choose if they want the insurance company to reimburse their medical bills or provide cashless treatment at a hospital.
Coming back to the details that make up an insurance contract, there are a few basic terminologies that can be hard to comprehend. It is important to know what these terms stand for to avoid any disappointment at the time of settling medical claims. Waiting period and survival period are two such terms that often feature in health insurance policies. By understanding the relevance of these terms, one can be better equipped to interpret the implications of their chosen policy.
What is Waiting Period in Health Insurance?
A waiting period in health insurance is a standard clause in most policies. As the name suggests, it is a pre-set amount of time, wherein the policyholder cannot raise a claim for medical conditions agreed upon. The insurance company decides the waiting period, and it can act as a buffer zone for them. The medical history of the policyholder is a major factor that impacts the duration.
Types of waiting period in health insurance
There are four types of waiting period. Factors, such as the promised coverage and the term of the policy, determine the type of waiting period for a particular plan. However, the basic rule remains the same, i.e. one cannot avail the benefits of health insurance until the waiting period is over. Mentioned below are the details of the various types of waiting period.
- Initial waiting period: This is the most common kind of waiting period, which lasts anywhere between 30 to 90 days. It begins from the day the policy starts. As mentioned before, one cannot claim medical insurance during this period. The only respite under the initial waiting period is that most insurance companies make an exception in case of hospitalization or the policyholder due to an accident.
- Pre-existing disease waiting period: One of the main points that one has to disclaim at the time of buying health insurance is their medical history. In case of a pre-existing illness, the insurance company can use the pre-existing disease waiting period clause, under which one shall not be able to claim any benefits. The duration of this waiting period can vary from a few weeks to a couple of years, depending on the disease and the insurer’s discretion.
- Disease-specific waiting period: Most health insurance policies do not cover a pre-decided list of diseases that may be contracted over time. This makes a claim ineligible if the hospitalization of bills submitted are for any of the listed diseases. The most common diseases to feature on this list are hypertension, hernia, diabetes, etc.
- Maternity cover waiting period: The maternity cover provides coverage for the delivery of children. Some policies even offer extra coverage for additional hospital costs. The waiting period for most maternity covers is between 2 to 4 years.
How is having a low waiting period beneficial?
For a policyholder, a shorter waiting period is beneficial as it allows one to take advantage of health insurance faster and not wait for the set amount of duration. This offers wholesome coverage to the individual.
One can compare various policy options online and choose a policy with a lower waiting period.
What is Survival Period in Health Insurance?
Health insurance policies sanctioned for critical illness carry a clause of survival period, in addition to a waiting period. Again, as the name suggests, the policyholder has to survive the pre-set term to be able to claim the benefits once diagnosed with a critical illness.
The period usually varies between 30 to 180 days, depending on the insurance company and the policy. Once the policyholder survives the period, they receive the benefits in a lump sum payment, which is then used to pay for the medical bills or used as income by the family. Upon making the payment to the policyholder, the policy is then ended.
A common mistake that most people end up making is assuming the meaning of unfamiliar terminologies or entirely overlooking the impact that they carry. One must educate themselves about the details mentioned in insurance policies to avoid unexpected delays later. These small considerations go a long way in preventing hassles in case of an emergency.
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