The different types of medical underwriting explained

Now, don't be put off by the word ‘underwriting’. Underwriting is just an insurance company’s way of deciding whether they can insure you.

In this guide, we explain the two main types of medical underwriting you may be offered as a new customer. And outline what happens if you switch insurer. We’ll also explain how medical underwriting works. This will give you a good idea about what questions you can expect in the application. And we’ll clarify how underwriting affects our decision about what cover we can offer you.

By the end of the guide, you’ll have a better understanding about the underwriting process and what it means for your health insurance cover.

What is medical underwriting?

When you apply for private health insurance, the insurance company needs to assess your past and current health. This is so they can decide what type of cover they can offer you. They do this by asking a series of questions.

The application for health insurance will include questions about your age, occupation and where you live. It may also include questions about your health and lifestyle. These questions are part of the medical underwriting process. Some of the questions you’ll be asked could include:

• your height and weight
• past medical conditions
• your general health and wellbeing now
• smoking and drinking habits.

If you’ve never had private health insurance before, you can choose whether you want to answer questions about your health, or not. If you answer questions about your health it’s called Full Medical Underwriting. If you choose not to, it’s called Moratorium Underwriting.

Once the insurance company has accepted your application, you’ll be covered for any new medical conditions. But the two types of underwriting have different approaches to pre-existing medical conditions.

What is a pre-existing medical condition?

A pre-existing medical condition is any medical problem you’ve had before applying for private health cover. These can be:

• physical health conditions
• mental health issues
• long-term conditions
• ·one-off medical events.

For example, it includes conditions like high blood pressure, asthma, diabetes and arthritis. Also, depression and anxiety, as well as broken bones, migraines, back ache, hip and knee pain.

If you have a pre-existing medical condition, insurance companies predict that you’re more likely to make a claim on your insurance. You are then considered more of a risk than someone who has no previous medical conditions.

It doesn’t mean that you can’t get cover though. But it may mean that the condition is excluded from cover. Or that you pay a higher premium to get cover. Some insurers may cover you for a pre-existing condition after you’ve held the policy for a few years. We explain how this works below.

It’s very important to give the insurer the full picture about your health. That way they can make an informed decision about the type of cover you can have. And you’ll know exactly which conditions are insured and which aren’t.

If you make a claim for a pre-existing condition that you haven't declared, you won't be able to get treatment. And you may even have your policy revoked.

Find out more: Health insurance and pre-existing conditions explained

Types of medical underwriting

As a customer who has never held a private medical insurance plan before, you’re likely to be offered the choice of Moratorium Underwriting or Full Medical Underwriting. There are other types of underwriting if you plan to switch insurance companies, or you belong to a company scheme.

Moratorium (Mori) Underwriting

With this type of underwriting, you don’t need to tell the insurance company about your full medical history when you take out the cover. Because they don’t look at your medical history, the insurance company will tell you whether you’re covered at the time you make a claim.

When you apply for your insurance, you won’t need to fill in a health history questionnaire. Any condition you’ve had in the five years before being insured will be excluded. After two years free of treatment, medication or advice for that condition, you may then be covered.

This means it’s easy to apply and you can be covered quicker than if you choose other types of underwriting. However, it means all pre-existing conditions are excluded from cover. It could also mean that your claim may take longer, as the insurance company will need to go through your medical history.

Moratorium Underwriting may be a good choice for customers with an existing condition that is well managed by NHS services. Or if you don’t need treatment for a pre-existing condition.

Full Medical Underwriting (FMU)

With Full Medical Underwriting, you'll need to complete a questionnaire about your medical history. In some cases, you'll also need to give the insurer access to your medical records. The insurer can then decide if they want to insure you or not, and whether cover is available for any pre-existing conditions.

You’ll be asked about your past and current medical history. You’ll need to provide dates that you received treatment and what that treatment was. You’ll also need to describe your symptoms and how frequently you get them. Plus, you will need to let the insurer know if you're going through any medical investigations or tests at the time you apply for the insurance. The insurance company will also ask about your family’s medical history. They need to know if there are any inherited conditions that you know about.

If you have a complicated or unusual medical history, this type of underwriting may take some time to complete. But it means you may be able to get insurance for a pre-existing medical condition that is excluded with Moratorium Underwriting. And if you need to make a claim you’ll already know whether the condition you’re claiming for is covered.

As part of the assessment process, you may be asked to:

• complete a full medical questionnaire
• consent to the insurance company looking at your medical records
• undergo medical screening for blood and urine
• take part in a tele-interview
• have a medical examination.

Continued Moratorium

If you already have health insurance on a Moratorium basis, you can usually switch providers on the same basis. You’ll then be subject to the terms and conditions of your new insurance plan.

Continued Personal Medical Exclusions (CPME)

This type of underwriting is for anyone who wants to change their provider and is currently insured on Full Medical Underwriting or Continued Personal Medical Exclusions underwriting.  Your new insurance company will transfer over your health insurance to them with any personal medical exclusions still in place.  But they may also add more exclusions to your cover.

This is particularly useful when you’re looking to make savings on your cover by switching providers. At Vitality, we offer Switch and Save which aims to provide a discount on your premium when you switch.

Medical History Disregarded (MHD)

With this type of underwriting, you don’t need to declare any pre-existing conditions. The policy covers any condition, even if you already have that condition.

These types of plans are only usually available through your workplace as an employee benefit. So, you generally won't be able to buy one as an individual looking for cover.

How does medical underwriting work?

There are basically three steps to medical underwriting.

Step 1: Application

A new customer completes an application for health insurance. This can be done through an online quote system, or on the phone with a sales adviser. The customer chooses whether they want Moratorium Underwriting or Full Medical Underwriting.

Step 2: Assessment

The customer’s answers are assessed. Most insurers use a sophisticated computer system to review the information in the first instance. Only if more information is needed will the application be reviewed by one of the underwriting team.

Step 3: Decision

Applications that go through Moratorium Underwriting will usually be accepted on standard terms. This is because all existing conditions are excluded from cover, so don’t pose a risk to the insurer.

Applications that go through Full Medical Underwriting are also often accepted on standard terms. Although, they may be subject to certain restrictions. These are explained below.

What are the possible outcomes of medical underwriting?

When a decision is made about whether a customer can be covered by health insurance, it usually falls in to one of five categories.

Standard terms. If you’re accepted on standard terms then your application is accepted as quoted. Your application is seen to be of little or no risk to the insurer. Most applications are accepted on standard terms.

Accepted but with exclusions. This means that the insurer will provide cover, but certain conditions will be excluded. This is usual for pre-existing conditions.

Accepted but with premium loading. With this decision, the insurer will take on the additional risk of insuring you, but it will cost you more than on standard terms.

Decision deferred. The insurer won’t take on the risk of insuring you at the moment. For example, they may wish to defer the decision until the results of medical tests are known.

Application declined. Cover isn’t offered because the risk is too high. Applications are only usually declined for serious and ongoing medical conditions.