In this article, we explain what moratorium underwriting is and how it affects your health insurance policy.
What is underwriting in the context of health insurance?
The term underwriting is used to describe the process of assessing and evaluating the risk involved in insuring an individual or business. All health insurance policies will be subject to a form of insurance, but in this article we specifically deal with the insurance moratorium.
What is a download moratorium?
Moratorium insurance is a type of private health insurance that automatically excludes pre-existing conditions from the last five years for a certain time frame – usually two years – but may cover them after that.
In essence, by categorically excluding pre-existing conditions within the past five years, the insurer removes the need to assess your medical history in advance. This has advantages and disadvantages which we will explain later in this article.
While moratorium policies automatically exclude pre-existing conditions within the past five years, many will provide coverage for those pre-existing conditions if you have been symptom-free for two years.
Advantages of taking the moratorium
Some of the benefits of taking a moratorium include:
- Less paperwork – with moratorium insurance, you do not need to fill out a medical questionnaire or go to a medical examination to take out a policy.
- You don’t have to disclose everything – you don’t have to remember your medical history or risk voiding your policy if you forget something.
- Lower costs- In many cases, you can often get a cheaper policy under the moratorium system.
- A shorter period of the previous state – only situations that occurred in the past five years are excluded. Fully medically insured policies often exclude conditions from any time in your past.
- Cover for pre-existing conditions after 2 years – If you have a pre-existing condition and haven’t had symptoms for two years, then it will usually be covered by your policy.
Disadvantages of the download moratorium
- Automatic shutdown – any medical condition that occurred in the last five years will be automatically excluded.
- Minor symptoms can lead to major exclusions – Smaller symptoms can lead to greater exclusion of the moratorium policy. Fully insured policies may not consider early symptoms of illness significant.
- The cover is not clear – You do not have a clear list of what is and is not covered by the policy. Basically, you won’t know until you apply.
- Two-year exclusion – pre-existing conditions will not be covered for at least two years
- Request delays – as the insurer defers medical assessment until the point of claim, you will often have to wait for them to assess your medical history before agreeing to pay
- Not everyone is eligible – not everyone can get a moratorium policy
Get advice on the right risk taking and policy
Choosing the right type of insurance for your circumstances can be difficult, which is why it’s always best to seek independent advice from a trained professional.
