What is a probationary period in health insurance?

A probationary period in health insurance refers to a waiting period during which no benefits are available to the insured. This period is typically defined by the insurer and serves to limit or exclude coverage for certain conditions or events that may arise shortly after the policy is issued. By implementing a probationary period, insurance companies can help mitigate the risk of immediate claims from new policyholders and encourage individuals to seek coverage before they require medical attention for pre-existing conditions.

This waiting period is critical for both insurers and insureds, as it helps manage the overall risk pool for the insurer while allowing policyholders to understand their coverage terms. It's important to note that while the policy is in escrow during the probationary period, the insured is expected to pay premiums, even though no benefits will be payable for claims arising during that timeframe.