Insurance companies institute waiting periods to assess insurability and mitigate risk. During this waiting period, the company reviews an applicant's health status, conducts necessary medical exams, or examines health records to determine eligibility for coverage. These waiting periods serve as safeguards, allowing insurance companies to make informed decisions about coverage based on the applicant's health history. The goal is to strike a balance that protects both the company and ensures equitable coverage for all policyholders.