Health Insurance Underwriting Options

One important decision you will need to make when purchasing a health insurance policy, is how you would like the policy to be underwritten. Our expert advisers find underwriting options to be one of the most misunderstood aspects of policies, among our clients. In this article we will decode the various options, how they are different, and what might work best for you. In the first instance it is important to understand what underwriting even means or relates to.

The principle aim of health insurance is to return the policyholder to the same level of health, as they when they took out the policy, should they become unwell. As with all insurance, it is not possible to insure against conditions you are already suffering from. Just as it is not possible to insure your car, after you have crashed it, and expect to be covered for the previous incident. Therefore, health insurance companies need a way to clarify your existing health status, before they are able to offer you a policy and determine your premium.

There are various ways this can be handled, which are known as the different types of underwriting. Some involve you needing to disclose your medical history, others don’t.

What is Health Insurance?

Before we get into the types of underwriting available, it is important to understand how health insurance works. Also known as private medical insurance or PMI, health insurance is an insurance policy, which covers the cost of private healthcare. It does not compete with the NHS; it complements it to achieve reduced waiting times, access to additional treatments and medications and makes the whole process more comfortable; with choice over hospitals and consultants and access to private en-suite rooms.

Health insurance is intended to cover acute conditions – things you can recover from. Not longterm ‘chronic’ conditions which you cannot. As with any insurance, policies vary and there are a multitude of different benefits, beyond the core cover, available for you to choose from. More on health insurance from our guide.

Full Medical Underwriting

The option of full medical underwriting requires you to share your existing health with your insurance company. This will usually require completing a full health questionnaire about any pre-existing conditions and may also require you to provide full medical records of all policyholders, or information from your GP. Pre-existing conditions which you have declared during this process, wouldn’t usually be covered by the policy.

The process of sharing your existing health is slightly lengthier than that of other options, but it does give you the reassurance that you will know exactly what you’re covered for, from the time you take out the policy. At the time of making a claim therefore, the process may be more straightforward as you will already know what you are covered for.

Moratorium Underwriting

Moratorium underwriting on the other hand, does not require you to disclose your existing health and tell your insurance company – at the time of taking out the policy – of any pre-existing conditions.

However, for the first two years of the policy, you will not be covered for anything which you have had symptoms, medication, treatment, advice or diagnostic tests for, in the last five years preceding your policy start date.

If following a consecutive two-year period, you meet the insurer’s particular criteria, that condition can then become eligible for cover. Usually the criteria would require that you haven’t received any treatment, medication or advice, nor experienced any symptoms from that condition during that time.

Moratorium underwriting is great for instant cover as there is no need to the process of medical checks. It also offers the potential for pre-existing conditions to become eligible for cover after a two year period.

Renewals and Switches

A common misconception with health insurance policyholders is that they are stuck with the policy they have; or they risk losing cover of pre-existing conditions and having to go through the two-year process again. In reality you may be able to switch your cover to a new provider, to save money, without compromising on cover. There are underwriting options for this scenario, and switching policy is much easier than people think. Incidentally, it can sometimes make large savings for our clients who are on a policy, which isn’t the best for them.

Continued Personal Medical Exclusions

Some insurers offer this option for policyholders who would like to switch from a full medical underwriting policy. It means they can switch to a new provider and carry any current personal medical exclusions, which apply to the existing policy, across to a new policy.

Continued Moratorium

This option is available with some insurers, meaning you can switch from a moratorium underwritten policy, keeping the start date of the original policy. Thus, meaning you would not need to go through the two year process, for pre-existing conditions to be eligible. As long as you have been symptom, advice and treatment free for the two years already, you would not have to do this again.

Hopefully this article will shed some light on what is, a sometimes-confusing topic. If you have any questions or would like to know more about your own specific circumstances, our expert, friendly advisers are on the end of the phone ready to help. Our service is free of charge and we are completely impartial and independent.