A term used in Accident, Sickness and Unemployment insurance and Payment Protection Insurance. Basically the time you have to wait between suffering the insurable issue and the insurance company paying up. Usually three months, by which time you will probably have recovered, got a job, died or won’t care much. One of the reasons why such insurance offers poor value. This may also be known as an elimination period.
It may also be used to describe the period between taking out a new insurance policy, i.e. health or flood insurance and the time from which you may make a claim on the new policy. Some policies do not allow claims within the first three or six months of the policy being taken out.