Have you ever wondered why policies such as funeral and life cover policies have a waiting period? A waiting period is a time frame in which you must wait before you can claim or have an insurance benefit paid out.
Difference between cooling-off and waiting period
Both cooling-off and waiting periods can affect your policy. Understanding the implications that comes with each will make it easier for you to navigate your way around your policy. A cooling-off period usually takes 30 day, which means you have the first 30 days to decide to cancel your policy. A waiting period is the time frame that is needed before you place your first claim. It can take up to 6 months for funeral covers. This could be different with life insurance policies that have a 2 year waiting period for claims relating to suicide. It could differ from insurer to insurer, therefore, checking the terms and conditions that come with your policy can prevent any surprises when it is time to place a claim.
Are waiting periods a safety measure or more red tape?
A misconception is that waiting periods are more red tape added by insurers, but this is a safety feature created to protect policyholders and insurers from dishonest and fraudulent claims. In the past year alone, insurers lost R787.6 million across different types of policies to dishonest and fraudulent claims. Without a waiting period in place, someone can make a fraudulent claim on something you have been working towards protecting you and your loved ones.
What to remember about waiting periods
