Do Life Insurance Policies Have Waiting Periods?

If you are looking to purchase a new life insurance policy, you may wonder if the policy has waiting periods. A waiting period means that the policy has to be in effect for a period of time before it would pay out due to your death. This is a question we are often asked at Idaho Select Insurance, serving the greater Meridian, ID area. Unfortunately, the answer is not the same for every policy. However, here is some information you should know if you are curious about life insurance and waiting periods.

Health Only Waiting Periods

The majority of life insurance policies have what they call health only waiting periods. This means that there is a waiting period only if someone dies because of a health-related issue. If there death is unexpected or an accident, such as a car accident, the policy kicks in. However, if they die because of a brain tumor within a week of buying the policy, the policy will not pay. This helps to deter people from buying life insurance when they are diagnosed with a deadly condition. Most policies with health only waiting periods have one to two year waiting periods before they pay out for health conditions.

Staggered Pay Out Waiting Periods

Some policies have staggered pay out waiting periods. This means that you may not have a strict waiting period, but you will not get the full amount of the policy at the beginning of the policy period. Depending on the policy limits and the terms, you may get less than half of the life insurance limit if you pass away before the waiting period passes.

Strict Waiting Periods

The last type of policy is a strict waiting period policy. With this type of policy, you have a strict waiting period. During this time, life insurance benefits will not pay out for any reason.

At Idaho Select Insurance, serving the greater Meridian, ID area, we understand the answer to whether policies have waiting periods or not can be tricky. As such, we aim to make it as simple as possible for you. If you are looking for a life insurance policy, we will explain everything to you, including the wait period requirements of the policy you are selecting. This will help you select a policy that is best suited to your needs.