The life insurance waiting period is a time frame between when your policy starts and when the full benefit becomes payable. During this period, certain conditions or claims may not be covered.
Such a time frame serves as a fraud prevention instrument — it disables immediate claims after the policy is issued. That helps to manage risk for insurers and benefits honest policyholders as they get more affordable, lower-risk rates.
Overall, waiting periods contribute to a fair and sustainable insurance system.
Typical waiting periods for life insurance can range from a few days to several years, depending on the policy and insurer. Common lengths can be 30 days, 90 days, six months, or two years. Shorter waiting periods often apply to accidental death coverage; longer ones are usually for natural death or pre-existing conditions.
Different types of waiting periods may include:
▪️ Initial waiting period
The risk-managing time immediately following the policy's start date, during which no benefits are payable. Benefits, especially for natural death, are not available until this period ends, although accidental death may be covered sooner.
▪️ Contestability period
Typically, after two years a policy is issued. During this period, the insurer can investigate claims and verify the accuracy of the information provided by the policyholder. If discrepancies are found, the insurer can deny claims or adjust the benefits.
▪️ Pre-existing condition waiting period
A time when conditions existed before the policy was issued are not covered. Its purpose is to encourage policyholders to obtain coverage before health issues arise.
The good news is that accidental death is typically covered even during the strictest waiting period. If the policyholder dies due to an accident, their beneficiaries receive the death benefit.
What isn't covered:
- Non-accidental death, including suicide (which is often specifically excluded for a certain period)
- Natural death, such as illness or old age
- Pre-existing conditions. Claims arising from these conditions will be denied until the pre-existing condition waiting period ends.
Some policies may offer partial benefits or return premiums paid if the policyholder dies of natural causes during the waiting period. Check with your advisor if your policy has such an option — it can be a relief to know about it.
And remember: coverage specifics can vary widely between insurance providers and policies. It’s crucial to read the policy terms carefully.
There are some factors to consider and some answers to ask yourself. Do you want more coverage or a shorter waiting period? Do you need your life insurance to start immediately, or do you have a backup plan and can wait and gain peace of mind knowing your loved ones will receive a more significant death benefit?
The life insurance waiting period depends on:
- Type of Policy.
Different life insurance policies, such as Term Life, Whole Life, and Simplified Issue, have varying waiting periods.
- Insurer’s Risk Assessment.
To assess risk, insurers evaluate the applicant's health, lifestyle, and age. If the risk is high, waiting periods can be longer. But that doesn’t apply to Guaranteed Issue policies, where everyone gets the same waiting period.
- Pre-existing Conditions.
The waiting period can be extended to avoid immediate claims related to known health issues. Or, it can be possible to exclude the existing condition from the coverage and get a shorter waiting period.
- Policy Terms and Conditions.
Each insurer has specific guidelines and underwriting criteria with terms and conditions determining the duration. Always check them when applying for the policy.
- Regulatory Requirements.
Different regions have various insurance regulations and laws that can impact the minimum or maximum length of waiting periods. Insurers comply with them when setting these periods.
Firstly, ask about the waiting period conditions prior to purchasing your life insurance policy. Also, it would be the right thing to:
▪️ Speak with your life insurance advisor to get expert insights and clarify confusing terms.
▪️ Be honest about your pre-existing health conditions from the start. You can get better-suited options (there can be some unique propositions or promotion opportunities) and avoid complications of hiding meaningful info.
▪️ And plan for some alternative coverage. You can benefit from a supplemental short-term policy or try to use insurance benefits provided by your employer.
In a complicated situation, you may want to discuss temporary financial support options with your family to ensure you have a backup plan during the waiting period.
“Does life insurance cover you immediately?”
Typically, no. The exception is accidental death, which is often covered immediately. But natural death and pre-existing conditions are usually not covered until the waiting period ends.
“Is there a life insurance policy with no waiting period?”
Yes. Some simplified life insurance policies offer no waiting period, providing immediate coverage upon approval. These are often called "no-wait" or "instant coverage" policies. Also, for some other policies, the waiting period may be waived if the applicant qualifies as low-risk — you should ask about this option when applying.
“What happens if I die during the waiting period?”
For natural causes or pre-existing conditions, the full death benefit usually is not paid out. The insurer may return the premiums paid or provide a reduced benefit (can be half of the amount, for example), depending on the policy terms.
But, if your death is due to an accident, most policies will pay the full death benefit even during the waiting period.
We hope our article helped you to learn something valuable about the waiting period options. With this knowledge, you can choose a life insurance policy that best suits your needs and expectations — and it can be an important part of your financial planning.
If you need to review the existing policy terms and conditions, or looking for a specialized life insurance policy, or want to get more personalized advice, feel free to consult with our licensed advisors. They can find you the best plan on the market according to your specific needs.
