A Guide to Waiting Period & Survival Period

Under health insurance, a waiting period is a period that should be passed before one’s health claim coverage can start. Survival period is a period during which the policyholder should survive after he/she has been diagnosed with a covered illness.

You’ve bought what appears to be an awesome new insurance policy from a man in a suit who refused to stop smiling at you. He probably didn’t answer any of your questions to the point or explain any of the fine print that could eventually lead to your insurance policy being rendered useless. That’s right, there are clauses in your policy that affect the possibility of your receiving any benefit right from day 1.

Insurance companies today run like any other business, and having to give you a promised benefit is an activity that would cost the business money. No good business lets go of its money unless it absolutely has to, and unless it has exhausted all options of saving itself (legally) from the liability of having to pay you. Always be aware that will do everything in their power to keep from paying you what’s due to you.

Read your policy documents thoroughly and don’t ignore the fine print in sections marked “waiting period”, “survival period” or “exclusions”. Most of the big players will exhaust all legal clauses in their policy document before reluctantly parting from their money and paying it to you as a benefit. Any clause you find that you don’t like can, and should, be renegotiated with the company. Many insurers have different clauses, and some of them actually want to help you out and are a benefit to the community.

Here’s some of the fine print relating to “Waiting Period” clauses:

  • All insurance policies come with a waiting period, which is basically a length of time in which you cannot claim any benefit from the insurance policy. Whatever happens to you, you have to wait for the waiting period to get over before you can make any claims and try to get any benefit.
  • There are three types of waiting periods – initial waiting period, pre-existing ailment waiting period and disease specific waiting period:
  • Types:
    1. Initial waiting period: Generally, if you fall sick or are hospitalised within 30-90 days (and in some cases 180 days) from the start of your policy, you will receive absolutely no help from the insurer whatsoever. The insurance policy is literally useless during this initial waiting period, except in the case of hospitalization or medical expenses arising due to an accident.
    2. Pre-existing ailment waiting period: If you have a disease or adverse medical condition that was present before, or at the time of, taking the insurance policy – you will not be covered for any hospitalization expenses that occur as a result of this “pre-existing ailment”. The waiting period for this clause could be anywhere from a few months to a few years (or many years) – depending on the type of medical condition you have and the insurer you choose.
    3. Disease-specific waiting period: Hospitalization expenses that arise out of – or can be traced back to – a list of pre-specified diseases will not be covered under your health insurance policy. What does that mean? It means that insurers will give you a list of diseases that, if contracted, will not be eligible for a claim. This waiting period also lasts for around 2 years after commencement of the policy. Common diseases in this list include (but are not limited to) hypertension, piles, hernia, ovarian diseases and diabetes.

You have to fall the right amount of ill, with the right disease, at the right time, in the right hospital, under the right conditions and circumstances and inform the insurer at the right time to be eligible for any benefit. The insurance company will make sure of that. Make sure you read, and re-read all your policy documents and re-negotiate with your insurer until you are satisfied.

Here’s what’s written between the lines with regard to “Survival Period” clauses:

  • As gruesome and pitiable as this clause sounds, it literally means that in order to receive any benefit whatsoever from your insurer – you must survive for a certain period of time after being diagnosed by a critical illness.
  • Mostly applies to critical illness policies.
  • There are three primary factors that decide the length of the waiting period – the disease, the insurer and the policy.
  • This waiting period is in addition to the regular waiting period that’s mentioned above.
  • Insurer will pay out a lump sum of money if you manage to survive the waiting period – and that money can then be used for treatment, or if it’s too late for treatment – your last vacation. Really, the benefit amount can be used for any purpose.

The fact that these clauses exist is a sad reminder of the power of the almighty dollar (or in this case, rupee). Even large organizations that claim to look after your family, or provide an umbrella under which you’ll be “protected” from the harsh realities of the world change their tone when it comes time to honour their claims. Insurers will scrutinize every clause in their policies looking for some aspect of your particular case that will relieve them of their legal obligation to pay you the benefit. Read and scrutinize every aspect of your policy documents and compare between insurers before taking a decision on one. Also research the claim to settlement ratios and claim honour ratios of the insurers you’re planning on taking a policy from.

GST rate of 18% applicable for all financial services effective July 1, 2017.

Disclaimer: Premiums may vary depending upon factors like age, location and prevailing taxes/GST.

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