What happens during the waiting period of an insurance policy?

During the waiting period of an insurance policy, no benefits are payable. This is a stipulated duration following the initiation of the policy during which the insured cannot claim any benefits. The waiting period is commonly found in life insurance and other types of insurance policies to help mitigate risk and encourage sustained policyholder commitment.

This means that if an event occurs during this specified time frame, the insurer is not obligated to pay out any claims. It's essential for policyholders to understand the implications of the waiting period because it affects when they can actually access coverage benefits.

For life insurance policies, the waiting period might be designed to protect the insurer against adverse selection, where individuals who are more likely to file claims are more inclined to purchase insurance. Therefore, during this time, any claims made will be denied until the waiting period concludes.