Waiting Period

A waiting period describes a period of time that has to pass after the approval and issuance of an insurance policy before any benefits can be paid out or medical expenses reimbursed.

In Singapore, the waiting period is typically between 30 days to 90 days.

The reason why insurers implement waiting periods is to prevent people with pre-existing illnesses buying insurance just to pay for treatment.

For example, a person has been diagnosed with kidney stones. He then hides this information from an insurer and purchases a policy that would pay for surgery in two weeks. The policy is then terminated after the claims have been funded.

While an insurer might still offer to insure such a client if he was truthful in declaring these medical data, it still means that they would not payout any benefits within the waiting period.

In this case, an insurance company might install as long a waiting period as possible.

Waiting period is also sometimes referred to as qualifying period or elimination period.

Is the waiting period even proper?

The waiting periods that are built into health policies have their fair share of critics.

Firstly, why would insurers categorize all consumers as people who might potentially exploit the system?

The odds of making reimbursement claims from genuine health issues in such a short time after obtaining a policy is already low.

And nobody in the right frame of mind would want to fall sick so badly that hospitalization is necessary.

Granted, there would be some people who’d want to take advantage of coverages without waiting periods. But preventing these abuses by penalizing everyone else adds no value to consumers.

Secondly, how can insurers collect a premium from the very first day of a policy, yet not provide any coverage during a waiting period of up to 90 days?

In almost all other industries, this makes absolutely no sense.

If you are buying a resale property, how would you (or anybody for that matter) agree not to live in the house for 90 days after closing?

If a seller insist on such a condition, a buyer would undoubtedly walk away from the deal.

And if you sign up for a mobile data plan, how would you feel if the telco starts collecting subscription payments but don’t provide coverage for the first 3 months?

Does it even make sense?

Anyone who is reasonable and don’t work for insurance companies should generally agree that if an insurer chooses to enforce a waiting period on newly issues policies where no claims can be made, then they should rightfully waive the premiums that are supposedly payable during the waiting period.

Then there’s the issue of the ethics of monetizing waiting periods too.

Some policies would allow new customer to get a shorter waiting period for higher premiums.

Conversely, the longer the waiting period one is willing to go, the lower the premiums would be. This implies that a client might be tempted to extend a period without coverage to save some money on premiums.

Referring Physician

Unique Impairment

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