What is the difference between Waiting Period and Survival Period in Health Insurance?

Posted on: Dec 22, 2020 | | Written by:

What is the difference between Waiting Period and Survival Period in Health Insurance?

Health insurance is a great way to keep yourself safe from any unexpected medicalemergency which can entail a lot of expense. This is the reason for its growing popularity among the masses. Yet,a health insurance planis meant to provide cover for unpredictable emergencies only. It is not meant to act as a way to offload existing medical expenses. This is the reason that health insurance companies have built safeguards like waiting period and survival period in their insurance plans.

Understanding the Waiting Period

The concept of the waiting period is to provide a cushioning duration after a person takes a medical insurance plan and the insurance company starts taking over the risk involved. It is built into almost all medical insurance policies offered by most insurers. Any non-accidental hospitalisation in waiting period is not covered.

The waiting period is generally of many kinds.

Initial waiting period, mostly lasts between one and three months and anything except road or industrial accidents is not covered during this time.

This is generally followed by a disease-specific waiting period. It can be anywhere between one to three years and covers diseases with expensive treatments like transplants, etc.

The waiting period for pre-existing diseases is also of similar duration, but covers any conditions, which the insured person may have previously e.g. diabetes.

Understanding the Survival Period

Unlike the waiting period, which applies regardless of the nature of the illness, the concept of survival period only applies to critical diseases. It is commonly found in a critical illness policy, which caters to life-threatening problems like kidney or heart failure, cancer, etc. Though regular health insurance plan also provisions for it. It is applied only after a critical illness is detected and can last anywhere between 30 to 180 days. This is over and above the regular 90-day waiting period as well. If the insured survives this period, they become eligible for a lumpsum payment that can be used for covering treatment cost or to cover loss of income. Policy ends when this payment is made.

What is the difference between Waiting and Survival Period?

The two concepts of waiting period and survival period may sound the same or similar, but they are completely different.

While all plans have a waiting period, not all insurance plans require a survival period.
While a waiting period is applicable regardless of the nature of the illness, survival period only applies for critical illness cases.
For regular health insurance plans, the waiting period starts as soon as the policy is issued, but the survival period only starts from the time the critical illness is detected.
Cover continues to exist after any payments post-waiting period as long asthe premium is paidon time,but any lumpsum payment post-survival period leads to termination of the policy.

What is the relevance of Waiting Period in Health Insurance?

There are a number of reasons why health insurance companies require people to undergo a waiting period:

To ensure that people do not use medical insurance to offload regular medical expenses
To protect the insurance company from any medical risk previously unaccounted for
To prevent cases of claim fraud from unscrupulous buyers
To offset any losses which may occur during high claim volumes caused by pandemics like COVID19, where people rush to buy medical insurance at the eleventh hour!

How to make the decision while buyinga health insurance policy?

The decision-making process with regard to both waiting and survival period for the policyholder is very simple. Opt for a policy, which asks for the shortest possible waiting and survival periods, without compromising on any other aspect of the cover. If you have to pay a bit higher premium amount, in order, to reduce either or both the periods, be ready to pay the extra money. Many people try to find a balance between longer or shorter waiting and survival period and lesser premium amount, but the fact is, when the need arises, shorter periods will make the difference of life and death!

Conclusion

To sum all the things, waiting period and survival period are protection systems to keep the insurance company safe from unwanted risks and frauds so that they remain in good financial health and can continue to serve more people for longer durations of time.

Disclaimer - The above information is for illustrative purpose only. For more details, please refer to policy wordings and prospectus before concluding the sales.

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