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Asking the definition of moratorium underwriting is one of the most common questions when applying for health insurance. The term isn’t self-explanatory and often confuses what it means in your private medical plan.
Moratorium underwriting loosely is the process that lays out the terms of your health insurance, excluding coverage for any pre-existing conditions you’ve had in the past 5-years.
This article will detail to help clarify the meaning of moratorium medical underwriting.
Before we break down the definition of moratorium underwriting, it’s essential to understand the basics. The reason is that the different types of medical insurance underwriting can be challenging to know without some foundational knowledge.
Medical insurance underwriting is a term used to define how insurers determine what degree of coverage you can have, either before purchasing health insurance or making a claim.
There are three general types of medical insurance underwriting, as outlined below:
The ‘medical history disregarded (MHD)’ category speaks for itself. It’s a type of underwriting where your entire medical history is irrelevant when purchasing health insurance – uncommon for individuals and often expensive when incorporated into plans.
In contrast to MHD underwriting, ‘full medical underwriting’ asks clients to disclose their complete health history before deciding eligible coverage on your health insurance plan.
The insurer will provide a form where clients must inform of any conditions they currently suffer from or have in the past. After analysis, they will decide what coverage they will offer from treatments.
That leaves the definition of moratorium underwriting, which is the focus of this article.
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The elementary definition of moratorium underwriting in private health insurance is that insurers won’t ask about your past health details. They focus on any recent treatments for recurring health issues or pre-existing conditions. They will exclude those from the insurance plan.
Insurers usually define ‘recent’ as 5-years. However, every provider has different definitions of years and moratorium underwriting in general. It is vital to understand how your prospective insurer defines it.
Considering that moratorium underwriting varies between insurers, it’s often the subject of confusion. Below, we outline and explain the most frequently asked questions about this type of medical underwriting.
Moratorium underwriting often speeds up getting health insurance because it doesn’t look at a detailed medical history. It only takes an interest in the conditions you’ve been treated for in the last 5-years or so.
Suppose you haven’t suffered from any medical conditions in the past 5-years. In that case, private health insurance with moratorium underwriting will generally be cheaper, too.
Pre-existing conditions are not part of your private medical insurance plan coverage. However, with rolling moratorium medical underwriting, these conditions may return to your policy.
The definition is that every 2-years, an insurer will review your policy to check if you’ve exhibited symptoms from your pre-existing conditions from that period. If you haven’t, then you’ll have treatment covered in your plan should they ever recur again.
As aforementioned, from the point of initial application, pre-existing conditions in the last 5-years will not have coverage in your health insurance plan.
However, suppose you’ve been healthy in the last 5-years or not had any severe illness treatments. In that case, pre-existing conditions are likely to have coverage in moratorium underwriting.
The insurer will ask for detailed information about your current ailment when making a claim. Your health insurance plan was with moratorium underwriting, and they do not have your medical history.
When you make a claim, the insurer will review it to ensure that it’s not related to any excluded pre-existing condition. If it is related, your doctor may have to issue a statement saying that treatment was unforeseen in given circumstances.
Generally, private medical insurance plans with moratorium underwriting will be less expensive than others—the reason being the exclusion of pre-existing conditions.
Again, pricing is at the insurer’s discretion and should discuss in detail before committing to a policy. Because it is cheaper than other plans, it often comes with the burden of complications when making a claim. We’ll explain in the advantages and disadvantages section below.
Every health insurance plan comes with its advantages and disadvantages. Clients will often need to weigh up the pros and cons of private medical insurance before purchasing their policy.
Here, we’ll outline the advantages and disadvantages of plans with moratorium underwriting.
Advantages of moratorium underwriting include:
The disadvantages of moratorium underwriting include:
Weighing up the pros and cons, you’d probably be deciding if moratorium underwriting is the best option for you. Should you still need more information, insurance brokers would elaborate further on what moratorium medical underwriting for each private health insurance entails.
Ensure you have a clear and concise understanding of the concept before purchasing policies.