What does a moratorium underwriting on private medical insurance mean?

Roman Danaev

19 December 2024

Moratorium underwriting is a health insurance approach that temporarily excludes coverage for pre-existing medical conditions for a set period, usually two to five years. If you have a relapse during this time, it typically won’t be covered. Unlike full medical underwriting, which examines your entire health history, moratorium underwriting is more flexible and simplifies the application process.

Learn more about the medical underwriting process and what it means for your health insurance cover here.

How moratorium underwriting works

If you choose moratorium underwriting for your health insurance, any pre-existing conditions from the past few years, usually five, will automatically be excluded. However, the timeframe varies by insurance company.

During the first two years, called the two-year moratorium period, you generally won’t be able to claim for a condition if:

• You were diagnosed with it in the last five years
• You received any treatment, like surgery, counselling, or physiotherapy, in the last five years
• You were prescribed and received medication for it in the past five years
• You’ve experienced symptoms in the last five years, even without a formal diagnosis (like back pain)

Once those two years are up, the insurer may start covering new symptoms or issues related to the condition, but it’s not guaranteed.

What impact does moratorium underwriting have when you make a claim?

Since the insurer doesn’t have your full medical history, they’ll ask for more information whenever you make a claim. This is especially true if you file a claim early in your policy, as they want to make sure it isn’t linked to any excluded pre-existing conditions. Your doctor might need to confirm that you couldn’t have predicted the condition you’re claiming before joining the policy.

If certain conditions were excluded from your coverage, you won’t be able to claim for them for at least two years. Also, some ongoing or recurring conditions may still be ineligible for claims, even after that waiting period.

Impact of moratorium underwriting on premiums

Moratorium policies usually have higher premiums than full medical underwriting plans. This is because most insurers factor in the likelihood of you making a claim when they set the price. Without any upfront medical information, they need to prepare for the possibility of expensive treatments in the future — so the premiums are often higher to help cover that risk.

Types of moratorium underwriting

Moratorium underwriting can be tailored to different needs, offering two main types for private health insurance applicants. Here’s a quick look at the options:

Standard moratorium

With a standard moratorium, any pre-existing conditions from a set period are excluded from coverage for a minimum of two years. If you remain symptom-free and don’t seek treatment, medication, or advice for these conditions during this two-year period, they may then become eligible for coverage.

Rolling moratorium

In a rolling moratorium, the two-year waiting period applies on a continuous basis. For any pre-existing medical condition to be covered, you’ll need to stay symptom-free and avoid treatment for two consecutive years at any point during your policy. Each condition’s waiting period effectively resets with any new treatment, medication, or advice related to that condition.

Understanding pre-existing conditions in moratorium policies

Under moratorium health insurance, pre-existing conditions (health issues present before coverage begins) are excluded for a certain period, such as:

• Diabetes
• Asthma
• High blood pressure
• Chronic back pain
• Previous surgeries

However, you should know that some chronic conditions, like ongoing arthritis or certain types of cancer, remain excluded even after the moratorium period. To prevent any issues, take the time to read your policy documents and understand which pre-existing conditions are included and which ones will always be excluded.

Other underwriting options

Before you sign up for an insurance plan, it’s important to understand what each underwriting term means, especially if you’re new to private health insurance:

Full medical underwriting

With full medical underwriting, you’ll need to share your complete medical history on the application. The insurer will carefully review all your medical records before deciding on coverage and may exclude any pre-existing conditions, including those from long ago.

Continued moratorium

If you’re already on a moratorium underwriting plan, you can switch providers with a different underwriting period. Just make sure your current policy is still active and that there are at least 12 months of moratorium period left before it expires.

Medical history disregarded (MHD)

MHD ignores any pre-existing conditions, meaning all health issues will be covered, regardless of when they occurred or if you’ve recently been treated for them. This option is usually not available for personal coverage, and it’s more common in larger corporate plans.

Continued personal medical exclusions

CPME is for people looking to change insurance providers. You’ll need to show the new insurer your latest insurance certificate, and they will decide whether to keep your existing medical exclusions. Those exclusions stay the same, but other policy terms might change.

Pros & сons of moratorium underwriting

Advantages of moratorium underwriting

• For many individuals, the cost of private health insurance is a significant factor. The good news is that moratorium underwriting often leads to more affordable policy options.
• You avoid lengthy medical examinations and extensive paperwork, which means faster access to coverage.
• You won’t have to worry about health issues from years ago impacting your coverage.
• There’s no need to provide your entire medical history, so the application process is more straightforward.

Disadvantages of moratorium underwriting

• There’s limited flexibility and conditions from the past five years are automatically excluded from coverage.
• The absence of your medical history means that the claims assessment process may take longer than expected.
• Even diagnostic tests and medications can affect your policy and influence what’s covered.

Switch moratorium underwriting

If you’re thinking about switching from your existing scheme, some companies will allow you to move your moratorium underwriting without needing to start a whole new policy. Just remember that many insurers have age limits, so you might need to be under a certain age to qualify.

Once your transfer gets the green light, the new insurer will take over the rest of your coverage period. After the two-year underwriting period is up, you can reset your policy date — assuming you haven’t had any symptoms, treatments, or doctor visits for a specific pre-existing condition during that time.

Who should consider moratorium underwriting?

Moratorium underwriting could be a good choice if you’re in overall good health and want a straightforward application process without diving into medical history. It’s also a strong option for those with older medical conditions that are no longer present. And if you’re looking to avoid lengthy exams and get covered quickly, a moratorium policy might be just what you need.

Which method is right for me?

Whether you choose moratorium underwriting or not ultimately comes down to your individual situation:

• If you’re new to health insurance, moratorium underwriting could be a great option.
• If you’re looking to change providers on a moratorium, you can usually transfer your existing coverage without starting from scratch and keep your benefits intact.
• If you’re moving from a group medical insurance plan, moratorium underwriting offers flexibility with pre-existing conditions.

If you have a detailed medical history and significant health concerns or want to maintain specific coverage levels when switching providers, other health insurance underwriting methods may be more suitable for your needs.

Comparing Health Insurance Providers

Finding your way through the health insurance options can be a bit overwhelming, especially with all the extra features available. You’ll encounter a variety of health insurance policies that look quite different, so it’s tough to know where to start.

Remember that your health needs are unique to you. What works for a friend or colleague might not be the right fit. Think about what’s most important to you — whether it’s coverage for specific treatments, how much you want to pay in premiums, or the availability of local doctors. Take your time to explore and compare what each policy offers so you can find the best coverage for your needs.

Final words

The moratorium period in health insurance offers a nice balance for policyholders. It allows you to get coverage without paying a lot extra for detailed medical history disclosures while making sure your claims for your previous medical conditions aren’t denied due to misunderstandings.

That said, it’s crucial to know what’s permanently excluded from your policy to avoid any surprises down the line. So, take the time to carefully read through your policy document when selecting your plan.