Insurance Awareness - Health Insurance
Which of the following best explains the rationale behind imposing a waiting period in health insurance policies?
Which of the following best explains the rationale behind imposing a waiting period in health insurance policies?
medium Q8 of Q15
Step-by-Step Solution
Step 1: Understand the purpose of waiting period
The waiting period prevents adverse selection by stopping people from buying insurance only when they need immediate treatment.Step 2: Evaluate options
To prevent policyholders from buying insurance only when they are ill correctly states this rationale; others are unrelated or incorrect.Final Answer:
To prevent policyholders from buying insurance only when they are ill → Option BQuick Check:
This is a fundamental principle to maintain insurer sustainability.
Quick Trick: Waiting period prevents adverse selection by delaying claim eligibility.
Common Mistakes:
MISTAKES- Assuming waiting period is for premium collection or policy understanding.
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