UNDERSTAND THE HEALTH UNDERWRITING TYPES
Health underwriting is the process health insurance companies administer when a policy is applied for and it is the way the insurer assesses the risk. Health insurance companies design policies to cover the financial loss due to new and acute health conditions, and they are not designed or priced to cover pre-existing health conditions. Some health insurers however will consider covering some health conditions by assessing detailed health information and in exchange for a premium loading which corresponds to the increased risk.
There are a number of health underwriting types used with health insurance, with the main ones summaries below.
FULL HEALTH UNDERWRITTEN (FMU)
Being fully healthly underwritten is when the health insurer asks many health questions to assess a full picture of your health history. These questions or some of them may cover your whole life and your answers to them may trigger the health insurer to ask additional health questions, or require you to have a health if above a certain age in order for them to accurately assess your health information.
In general health insurers will exclude all pre-existing health conditions, but as mentioned above, some insurers allow some forms of health conditions to be covered under certain circumstances.
If when applying the health insurance company wants to exclude a health condition they will notify the applicant of this and if this exclusion will be for a limited period of time or indefinitely. Before setting up the cover the insurer will ask the applicant to confirm if they accept their offered condition or not, and upon receiving confirmation the insurer will setup the policy.
- A full assessment of the applicants health is assessed
- This provides upfront clarity on what will or will not be covered by the policy
- The cover can be tailored to applicants conditions with some insurers
MORATIUM UNDERWRITING (MORI)
A moratorium underwriting application will ask a limited number of health questions or none at all, and this results in the health insurer excluding health conditions affecting you in recent years, typically the last five years.
The difference with moratorium underwriting is that some health conditions may become eligible for coverage later, and after a period of time where it has no longer affected you, including any symptoms or the need to have tests or medication to treat it. This period is normally two years after the start date of the policy.
- Simpler application process with either no or a limited number of health questions.
- Fast policy setup and guaranteed acceptance with some insurers.
- Excludes coverage for pre-existing conditions