What might a waiting period be used for in health insurance policies?

A waiting period in health insurance policies is primarily used to postpone benefits for specific medical conditions. This means that if a policyholder has a pre-existing condition, the insurance company may impose a waiting period during which they will not cover any treatments related to that condition. This approach helps insurers manage risk by reducing the likelihood of immediate claims for conditions that the policyholder had prior to obtaining the insurance.

The implementation of a waiting period is a common practice to safeguard against adverse selection, where individuals might otherwise wait until they are ill to purchase insurance. By having such a waiting period in place, insurers ensure that they can operate sustainably while providing coverage for members in good health as well.

Other options do not adequately capture the purpose of a waiting period in health insurance. While reducing premium costs can result from various underwriting practices, it is not a direct function of waiting periods. Ensuring the policyholder maintains coverage relates more to the policy's terms and conditions rather than a waiting period itself. Lastly, assessing claims history is a process that occurs before issuing a policy and does not pertain directly to the application of waiting periods for benefits.