What Is a Blackout Period in Insurance?

Blackout dates are a familiar annoyance to anyone with season passes to Disney World because they refer to times of the year when their passes do not permit them to enter the park for free. Blackout dates can also refer to restrictions in other contexts. Here is an explanation of what a blackout period in insurance means.

What Is a Blackout Period?

A blackout period is a predetermined selection of days or weeks during which the holders of a contract temporarily prohibit an activity that they normally allow. The term conveys the mental image of a calendar with black ink covering various days.

What Is the Purpose?

In financial industries, the purpose is often to prevent people who work for the company from trading stocks they have inside information about. In insurance, the purpose usually has more to do with bookkeeping. By not allowing clients to make changes during a certain period, it is possible to keep better records.

What Is an Example of Something You Cannot Do?

Here are examples of prohibited activities during blackout periods:

  • Decrease a deductible
  • Change beneficiaries
  • Add coverages

Time restrictions for certain activities are usually part of the fine print in insurance contracts. If you are uncertain whether your policy has blackout dates, talk to your insurance agent.