When we enter the workforce, we are motivated to work hard to achieve our goals. However, with time, our responsibilities and liabilities grow with us. As a result, we put our everything into work to ensure our loved ones get to live out their dreams and goals. However, we subject ourselves to hectic schedules and stressful routines in this process. These routines can have a severe impact on our well-being. Therefore, we must take care of ourselves while caring for our loved one’s financial well-being.
Out of the different methods for protecting your loved ones, getting a term insurance plan is one of the most effective methods. With term insurance, your loved ones get the financial coverage they need for dealing with your absence. Most insurers like Tata AIA allow customers to purchase term insurance online. Along with this, you also get to use tools like term insurance calculators for purchasing the Tata AIA term insurance plan.
While purchasing the term insurance plan for your loved ones can be helpful, you must learn about the policy and its coverage extensively. Along with this, you must also learn about the waiting period associated with the plan.
Meaning of Waiting Period in Insurance
The period wherein the customer has purchased the policy, but cannot file a claim is called the waiting period. It is when a policyholder has to wait before their coverage comes into effect. The waiting period is also sometimes referred to as the cooling period. If the policy’s waiting period is active, policyholders may not get the life insurance benefits.
What is Term Insurance Waiting Period?
Almost all term plans offer you coverage since the first day of the policy purchase and when it has become active. However, certain policies aren’t activated immediately. The waiting period of certain insurance companies can last between a few days to 2 years. Sometimes the waiting period clause can go up to 4 years. However, this happens only in rare cases.
Listed below are provisions of the term life insurance plan in the event a customer passes away during the waiting period:
- If the policyholder has passed away before making any premium payment, the insurance company is not liable to pay out any compensation to the customer.
- In case of a critical illness, the insurance company will not provide a payout if a policyholder passes away during the waiting period. However, suppose the critical illness is diagnosed during the waiting period or within 90 days from the policy purchase date. In that case, the policyholder of a beneficiary can file a claim for treating the issue.
- Suppose the policyholder passes away during the waiting period. In that case, their beneficiaries can file a claim for the amount paid as premiums from the policy purchase date until the last premium payment date or the date of death, whichever is first.
The waiting period in insurance is the duration between the policy purchase date and when the policy begins offering insurance coverage. Term insurance plans generally do not have a waiting period. However, some term plans include certain clauses that do not cover critical and terminal illnesses. Therefore, you must read through the terms and conditions before purchasing the plan to make sure that you know when your policy will start offering the coverage and the number of days you will need to wait to get the term insurance benefits.