What does the term "waiting period" signify in insurance policies?

The term "waiting period" in insurance policies signifies the time before coverage officially begins. During this period, the insured may not be able to make claims, as the policy is not yet in effect. This waiting period is often included in various types of insurance, particularly health insurance or disability insurance, to prevent individuals from signing up for coverage only when they know they need to use it.

This period is crucial for insurers as it helps manage risk and ensures that policyholders commit to the contract before they can receive benefits. For example, in health insurance, a waiting period might occur for pre-existing conditions, meaning that treatment related to those conditions won't be covered until the waiting period has elapsed. Understanding this concept is essential for policyholders to know when they can access their benefits after purchasing coverage.