What is Health Insurance Underwriting?
Underwriting simply refers to the policy terms a health insurer will cover you under. Underwriting is the bedrock of every insurance contract, which means it’s incredibly important to understand how you’ll be underwritten when buying Medical Insurance.
When you purchase Health Insurance, you can decide on the terms the policy will be written under. Which medical underwriting is best for you will depend on your medical history and any pre-existing medical conditions you might have.
Insurance is designed to protect you against future events, not cover you for events that have already happened. Naturally, no insurer would allow you to buy insurance the day after a burglary and claim for the stolen items. Medical insurers take the same approach.
Health & Wellbeing Expert at Drewberry
The underwriting process could see the insurer put exclusions on health conditions you’re already suffering from and sometimes those you’ve suffered from in the past.
Both full medical underwriting and moratorium underwriting could involve exclusions based on your history, but depending on the underwriting you choose it may be possible to get coverage for any past previous medical conditions you’ve suffered from.
Unfortunately, neither type of underwriting will allow you coverage for a condition you’re currently suffering from or receiving treatment for, but if that condition subsides for long enough to satisfy the insurer’s terms, you may be able to get coverage later on.
What is moratorium underwriting Medical Insurance?
Moratorium underwriting is a method of Private Health Insurance underwriting that excludes most pre-existing medical conditions you’ve suffered from over a set period, usually the past five years.
You don’t have to provide any medical information immediately if you’re underwritten on a moratorium basis, but when you make a claim the insurer has the right to check your medical records to ensure you’ve not suffered from the condition you’re claiming for within that five year window.
Moratorium underwriting is the most common type of medical underwriting for Health Insurance is divided into plans underwritten on a rolling moratorium or a fixed moratorium basis.
What is rolling moratorium medical underwriting?
The vast majority of Health Insurance is written on a rolling moratorium basis.
Rolling moratorium underwriting means the insurer will consider any claims for medical conditions that you’ve suffered from in the five years before taking out the policy, providing you’ve served two years on the policy without any advice, medication or treatment for that condition. This includes both self-funded private treatment or NHS treatment.
After a skiing injury, Mason was fully discharged from followups after shoulder surgery the year before taking out cover. For the next three years on the policy Mason was fine and required no further advice, treatment or medication, but then had a sudden relapse.
In this case under a rolling moratorium the insurer would most likely pay for treatment as Mason hadn’t needed to seek medical advice for three years after taking out her cover.
What is fixed moratorium medical underwriting?
Fixed moratorium underwriting is a more lenient type of underwriting that rolling moratorium underwriting. It still excludes any medical conditions you’ve suffered from in the five years leading up to the policy start date.
However, once you’ve served two years on the policy, the insurer will then consider covering you for that condition – regardless of whether you’ve received treatment for that condition or not over those two years.
It’s important to realise that often the most serious conditions – such as cardiac and cancer cases – are unlikely to be eligible for fixed moratorium underwriting.
Only one insurer still uses fixed moratorium underwriting for its Medical Insurance – The Exeter.
After injuring her knee a year before taking out Health Insurance, Amy had an arthroscopy to repair damaged cartilage. In the first two years of having Medical Insurance, Amy visited an NHS physiotherapist and her GP for follow-up treatment and advice.
Under a fixed moratorium, despite having needed treatment in the first two years of the policy, the insurer would consider covering her knee condition.
What are the pros and cons of moratorium medical underwriting?
Advantages of moratorium underwriting
- Moratorium underwriting can speed up the implementation of your Medical Insurance because you don’t have to fill in a health declaration.
- This can also mean a policy underwritten on a moratorium basis can reduce the paperwork involved with setting up a policy.
- If you haven’t suffered from any major health conditions in the past five years, moratorium underwriting means there’ll be no automatic exclusions.
- If you do have any pre-existing conditions, you may be able to get coverage for them after a two year period on the policy.
- The five year window means that historic medical conditions before this five year period will usually be covered.
Disadvantages of moratorium underwriting
- Even if you’ve only suffered from a minor health condition in the past five years, this will likely be automatically excluded with little chance for leeway from your insurer.
- With moratorium underwriting, you may not be sure exactly what you’re covered for based on your past medical history until you try to claim.
What is full medical underwriting Health Insurance?
Buying fully medically underwritten Health Insurance basis means you disclose your entire medical history to the insurer from the start.
This lets your insurer take your health into consideration when deciding how to provide you with cover.
Do I need to disclose my medical history to take out Health Insurance?
Yes, if you opt for full medical underwriting then you’ll need to fill out a health questionnaire to buy Medical Insurance.
You provide your medical history through a health declaration form, which will ask a set of questions about your health and previous medical conditions.
Depending on what comes up on the form, the insurer might write to your GP for further evidence of your medical history to back up the underwriting.
Any disclosures on the health declaration form or that later come up if the insurer decides to write out for your medical history will result in an exclusion for that condition.
It’s essential that you’re upfront and honest with your insurer when you’re filling in the health declaration form.
Any failure to disclose a pre-existing condition, even if you think it’s not worth putting down, could lead to your Health Insurance provider pulling coverage later down the line on the grounds of the non-disclosure.
Employee Benefits Consultant at Drewberry
With full medical underwriting, any serious condition you’ve suffered from in the past will likely be excluded, even if it occurred more than five years ago.
This exclusion will usually be permanent, although it may be possible to get it lifted at a later date with medical evidence from your GP.
For more minor conditions, however, you may be able to negotiate coverage with your insurer, particularly if that condition occurred a number of years ago.
What are the pros and cons of full medical underwriting?
Advantages of full medical underwriting
- Transparency – you know exactly what you will and won’t be covered for from the outset
- You may be able to get coverage for conditions that have occurred during the past five years, especially if that condition is minor, subject to your insurer’s discretion
Disadvantages of full medical underwriting
- It can take extra time to arrange a policy when it’s fully medically underwritten because of the health questionnaire and the possible need to write to your GP
- Your GP may charge for providing medical reports to your insurer – and this is usually a cost the insurer won’t pay for, leaving you with the bill
- Similarly, if further down the line you want to examine having a medical exclusion removed from your policy with evidence from your GP, you’ll likely need to pay for these reports as well. However, there’s no guarantee that the insurer will accept your attempt to get the exclusion removed even after you’ve paid for the reports.
What is the best Health Insurance underwriting?
Now you understand the difference between full medical underwriting and moratorium underwriting, you’ll have to consider which is the best health insurance underwriting for you.
Which medical underwriting is best after serious medical conditions?
If you’ve recovered from a serious medical condition in the past five years, such as cancer, it may be better to opt for moratorium underwriting.
That’s because after two years on the policy, the insurer will reassess your health and, providing you haven’t sought any advice, medication or treatment for that condition in those two years, potentially look in to covering you.
With full medical underwriting, on the other hand, this serious condition is likely to face an ongoing exclusion, even if you suffered from it more than five years ago. It can be very tricky to get an exclusion removed from a policy that’s used full medical underwriting at a later date.
Which medical underwriting is best after minor medical conditions?
If you’ve suffered from a minor condition in the past five years, though, then full medical underwriting may be better than moratorium underwriting.
This is because moratorium underwriting will put an exclusion on most medical conditions you’ve suffered in the past five years regardless of severity.
However, when an insurer examines your medical history during the full medical underwriting process they may deem the condition to be minor enough for them to offer you cover for it regardless.
Which medical underwriting is best for historical medical conditions?
If you’ve suffered from a medical condition more than five years ago, then moratorium underwriting is likely better than full medical underwriting. This is because moratorium underwriting only looks at conditions you’ve suffered in the past five years.
Full medical underwriting, on the other hand, will go back through your entire medical history and may put exclusions on policies you’ve suffered historically, even if you’ve not had any symptoms for some time.
Need advice on the best underwriting for you?
If you’re still not sure which option to pick when taking out Private Medical Insurance, then talking it over with an expert insurance adviser can help.
They can listen to your concerns and take a basic medical history from you before using their experience and expertise to help you decide which medical underwriting is better for you.
At Drewberry we always aim to help our clients find the best Medical Insurance policy for them to offer them peace of mind that their health will be well looked after.
If you want to discuss getting PMI with an expert adviser, then feel free to drop us a call on 01273646484.
Health & Wellbeing Expert at Drewberry