Underwriting in Private Health Insurance?

Medical underwriting refers to the use of medical information to evaluate an application for private health insurance to decide whether to accept it and, if so, at what premium rate and with what benefit limits.

People sat round a table with men shaking hands

The type of underwriting also determines which health conditions are covered and which are excluded on a policy. Depending on whether you’re new to health insurance or switching providers, different underwriting options will be available to you.

What You’ll Usually Get Asked About

When applying for insurance or health coverage, you’ll be asked to fill out a form that will serve as the insurer’s basis for a contract and decision. To determine your health status, the most common bits of information you need to disclose honestly are as follows:

  • Previous and current medical history: Also usually includes disclosure of treatment dates, medications, symptom frequency, and ongoing consultations and diagnostic tests
  • Weight and height: Used to determine your BMI; those who don’t meet the ideal weight and height based on BMI will usually expect an increase in the standard rates or premium
  • Inherited conditions or family’s medical history: Helps determine your risks for similar conditions
  • Vices: Regular, heavy smoking and alcohol consumption play a significant role in the cost evaluation process due to a high risk for long-term liver and lung diseases
  • Occupation: As basic information as it may be, some jobs put an applicant at high risk for particular illnesses and disabilities that can increase their premium for critical illness medical plans and life insurance

What are the Different Types of Medical Underwriting?

Moratorium Underwriting

Moratorium medical underwriting doesn’t require you to declare your full medical history upfront. Instead, it excludes cover for any conditions for which you have had symptoms, advice or treatment during the past five years. However, after a continuous two-year trouble-free period after starting the policy, you will then be entitled to cover for such conditions. Bear in mind that the definition of ‘trouble-free’ varies between insurers.

Full Medical Underwriting (FMU)

Full medical underwriting usually requires you to disclose your entire medical history to the insurer, who will then provide a list of specific exclusions based on your disclosed pre-existing medical conditions. However, the FMU route is unique to different insurers, so may not always lead to exclusions. If you want a health insurance policy with black and white terms from day one, this is probably the best option.

Continued Personal Medical Exclusions (CPME)

If you are looking to change your current health insurer, you’ll typically be given the option to switch on a continued personal medical exclusion basis. This often means that your new insurer will retain your current underwriting and continue to cover the same conditions. Each insurer has its own eligibility criteria though, and if you don’t meet its switch requirements, new exclusions may be added to your policy.

Continued Moratorium (CM)/Switch Moratorium

Continued moratorium underwriting is available to those switching health insurance originally underwritten on moratorium terms. It allows you to continue your existing underwriting and it’s possible to carry cover across for the same conditions.
However, it’s important to find out whether the provider will apply their own moratorium terms or honour those of your existing insurer before you switch. For example, if you have met the trouble-free clause with your previous insurer, you’ll want to keep these moratorium terms so you are eligible for cover for this pre-existing condition.

Medical History Disregarded (MHD)

Past medical history and pre-existing conditions don’t lead to any exclusions from the moment a group policy begins. Each person on the document will be covered for any pre-existing and new conditions until the end date. MHD underwriting is typically only available on company private health insurance with a minimum group size of 15 employees.

How will Medical Underwriting affect My Quote?

The type of underwriting can impact the cost of your policy depending on which provider you are choosing to insure with. Often providers will offer a small discount for Full Medical Underwriting and for certain clients this may be beneficial as there are certain conditions that can be covered with Full Medical Underwriting that may otherwise be excluded on a moratorium.

The cost of Switch underwriting can vary quite significantly depending on a provider as this is only available for members that are currently insured. Some providers will take into consideration how many claims you have had and when you last claimed. This can increase or reduce the cost of your quote depending on your claim’s history.

Although Medical History Disregard underwriting is only available for company schemes over a certain size this is typically the most expensive method of underwriting as it will cover pre-existing conditions from the day the policy starts. As the risk of employees submitting claims immediately is increased the premium quoted reflects this.

What You Can Do to Reduce Your Health Insurance Quote

If you are concerned about medical underwriting affecting the price of your policy, then there are several steps you can take to reduce the cost of your health insurance quote. The first is to use a private medical health insurance broker like Clarity Health Insurance to compare the different policies available to you. With access to a broad panel of different private health insurance providers and detailed knowledge of the sector, the advisors at Clarity Health Insurance can help find a policy at a price that best fits your budget.

Another step you can take is to ensure that the policy you purchase provides the exact coverage you need. Tailoring your protection to match your health needs, or the needs of anyone else you add to the policy, can help reduce the costs by not paying for any unnecessary treatment options or additional benefits. Your Clarity Health Insurance advisor will be able to talk you through the different options available and help ensure your policy is right for you.

Maintaining a healthy, active lifestyle can also help reduce your private health insurance policy cost, especially those that ask to see your BMI as part of their medical underwriting process. You should take advantage of the various fitness apps and smart tech that track your activity levels. These can provide evidence to support the claims you make about your health.

It may also be a good idea to try and resolve any outstanding medical issues that you have. Be that seeking treatment that can help lessen the negative impact of the condition, or opting for corrective surgery for a long-term health issue. While they may not impact your quote now, you may benefit from having treated these conditions when the time comes to renew your policy.

If you would like further information about underwriting based on your personal circumstances, then complete a quote form and an expert adviser will call you to discuss.