When applying for a health insurance cover, the insurance company usually assesses your medical history through a medical questionnaire. This procedure is called Full Medical Underwriting (FMU). Other companies may skip the medical questionnaire and accept new policy holders straight away, regardless of their medical history, but automatically exclude all pre-existing conditions. This process is called Moratorium. This article looks at the difference between full medical underwriting and moratorium.
What is Full Medical Underwriting?
In the case of Full Medical Underwriting, each prospective client completes a medical questionnaire as part of their application form. Following this there can be: acceptance on standard terms, a refusal to offer cover, a surcharge, a time limited exclusion, or a total or partial exclusion of certain risks for the entire duration of the contract. The outcome depends on many factors such as the severity of a medical condition, the age of the insured, and the insurance company.
What is Moratorium?
If the insurance company offers Moratorium contracts, no medical questionnaire is required, but the medical history of the prospective client is subject to exclusion period, generally set at two years, but variable depending upon the company. Therefore, for each claim made during this moratorium period, the insurance company will investigate whether the medical condition in question is a pre-existing condition or not, and decide at point of claim whether or not the cost is eligible for reimbursement.
Which health insurance contract is better?
The Moratorium and FMU approaches each have their own advantages and disadvantages. For example, while a history of breast cancer may lead to a permanent exclusion as part of an FMU subscription, with a moratorium contract, if you have no symptoms and have not had any check-ups/ treatment / consultations during the moratorium period, you will automatically be covered after this waiting period if the condition is covered by the standard terms of your policy.
A person who suffered from breast cancer five years previously and who is fully recovered would probably prefer to opt for a moratorium contract. However, if the cancer reappears during the moratorium, the treatment would not be covered and the moratorium waiting period will be reset and start again from zero once the treatment has finished.
FMU contacts are often more desirable as it is made clear from the start which conditions will not be covered (if indeed you suffer from any pre-existing conditions). Whereas with a moratorium contract, insurance companies will decide at point of claim if a condition is covered by the policy, tending to investigate each claim more thoroughly. This leads to a more complicated and lengthy reimbursement process. Another difference is that in the case of Full Medical Underwriting, certain less severe pre-existing medical conditions may be accepted by the insurer, but with the Moratorium, even the slightest pre-existing condition will be excluded during the moratorium period.
However, the best choice will often depend on your personal situation rather than general rules. Expat Assure can help you decide what kind of health insurance application process is more suited to your situation. Feel free to contact us or fill in a form online to request a non-obligatory health insurance comparison.
You may also be interested in the article “Buying expat health insurance with pre-existing conditions”.
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