Why are the first 21 days generally excluded in sickness cover policies?

The rationale behind the exclusion of the first 21 days in sickness cover policies typically centers on protecting the insurer from pre-existing conditions or illnesses that might not have been disclosed. By implementing this exclusion period, insurers can limit their liability for ailments that could have been contracted before the policy’s effective date. This is important in risk assessment, as it helps ensure that policies are only activated for illnesses that arise after the coverage begins, allowing for a fairer and more sustainable insurance model.

This arrangement encourages policyholders to engage in honest disclosures about their health before obtaining coverage. By limiting coverage for a specified initial period, insurers can mitigate potential losses from claims that arise shortly after the policy is issued, which could be indicative of an underlying condition the policyholder was aware of prior to taking out the insurance.