What happens during the "waiting period" in an insurance policy?

During the "waiting period" in an insurance policy, no claims can be paid. This waiting period is a specified amount of time after the policy is issued or after a specific event occurs, during which the policyholder must wait before coverage becomes active. The primary purpose of this period is often to prevent individuals from purchasing insurance only when they foresee needing to file a claim. For example, in health insurance, there may be a waiting period for certain pre-existing conditions, ensuring that only those who are purchasing the policy for legitimate reasons are able to access benefits.

While claims can be filed during this period, they are not eligible for payment until the waiting period has elapsed. The waiting period protects the insurer from potential financial loss due to claims filed shortly after the policy is taken out. This mechanism encourages policyholders to maintain their coverage over time rather than seek insurance only when they anticipate needing it.