Moratorium underwriting vs full medical underwriting

What are the two main types of private medical insurance underwriting?

Private medical insurance policies offer two underwriting options. You can choose between moratorium underwriting and full medical underwriting. The type of underwriting you choose doesn't affect your policy's coverage. Your health insurance provider will still offer cover for core services and treatments and a range of optional extras so you can tailor your coverage to suit your circumstances.

All health insurance providers have standard exclusions that apply to every policy. For example, you can't get private health insurance for chronic conditions, such as asthma, diabetes or angina, as these are automatically excluded. Other standard exclusions could include treatment for addiction, cosmetic surgery or straightforward pregnancy and childbirth. Each insurer will have its own list.

Pre-existing medical conditions and the moratorium period

Health insurance policies exclude pre-existing medical conditions. Pre-existing conditions are defined as any condition where you've experienced symptoms that required medical advice or treatment during the five years before the start date of your policy. This means you won't be able to have private medical treatment for that condition or any related conditions. For example, if you've had treatment for hip pain, your insurance won't cover anything related to that condition, including a hip replacement. Of course, you can still have treatment via the NHS.

The moratorium period

A moratorium is the waiting period applied to your policy before a pre-existing condition can be covered. You might have had treatment in the five years before your policy started, which means it'll be excluded from coverage. However, if you're symptom-free for a two-year period at the start of your policy, your insurer can provide cover.

It's important to remember that you'll need to be symptom-free for two continuous years, as a rolling moratorium will typically apply. The rolling moratorium will restart if you don't have symptoms for a year but then need treatment.

Moratorium underwriting

When you opt for underwriting on a moratorium basis, any pre-existing conditions will be excluded from cover for the first two years of your policy. Here are some of the advantages of moratorium underwriting and a potential disadvantage.

The underwriting process

The application process is usually quick and easy when you choose moratorium health insurance, as the insurance company won't ask you to provide any information about your medical history or any pre-existing medical conditions when you apply. This makes moratorium underwriting the ideal choice if you have a good medical record, as it's unlikely there will be any pre-existing conditions to exclude.

You'll be able to get a quote for the health insurance policy you want and start paying the monthly premiums.

The claims process

One of the disadvantages of moratorium underwriting is that your claim may take longer to process. Your insurer will investigate your medical history when you get in touch to check whether a specific pre-existing condition excludes your medical condition from cover. This may mean you face a longer waiting period before starting treatment.

Cost

Moratorium policies tend to have higher premiums than policies with full medical underwriting. This is because insurers assess the risk that you'll make a claim when they provide a quote. Because you don't give any medical information before taking out a policy, your insurer needs to offset the risk that you'll need expensive treatment in the future. This is usually reflected in higher insurance premiums.

Switching to a new health insurance provider

When your health insurance policy comes up for renewal, you can shop around and find a better deal with another insurer. However, you may be reluctant if you haven't needed treatment for a pre-existing condition for a one or two-year period and would have to start from scratch with a new insurer.

Thankfully, you can keep your existing moratorium when you change insurers. Switch moratorium underwriting (also known as continued moratorium underwriting) allows you to transfer the moratorium you've already earned to a new insurer.

Full medical underwriting

Full medical underwriting (FMU) excludes pre-existing conditions from cover for the first two years of your policy in the same way as moratorium underwriting. The key differences between the two types of underwriting lie in the underwriting and claims processes.

The underwriting process

When you choose full medical underwriting, you'll be asked to complete a health questionnaire giving details of your full medical history and any pre-existing medical conditions. You'll also need to sign a medical declaration confirming that the information you've provided is accurate.

This can mean that your application takes longer, as your insurer may contact your doctor for further information on your medical history as part of the process before they offer coverage.

The upside is that your insurer can confirm whether you have a pre-existing medical condition that will be excluded from cover before you take out the policy, giving you a clear understanding of what is and isn't covered.

The claims process

One of the main advantages of full medical underwriting is that you and your insurer know what's covered by your health insurance policy from the start, reducing your risk of having a claim rejected. It also means that the whole process is quicker as your insurer doesn't need to investigate your medical history before they make a decision.

Cost

Generally speaking, opting for full medical underwriting means your premiums will be lower. This is because your insurer can accurately assess your personal circumstances, any pre-existing medical conditions and the risk that you'll need treatment before they give you a quote.

Switching to a new health insurance provider

If you review your health insurance policy when your policy comes up for renewal, you may find that another insurer can provide better coverage with lower premiums. If switching means a new pre-existing medical condition will be excluded from coverage, continued personal medical exclusions underwriting allows you to avoid this.