MEDICAL UNDERWRITING PROCESS

UNDERSTAND THE MEDICAL UNDERWRITING TYPES

WHAT IS MEDICAL UNDERWRITING?

Medical 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 medical 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 medical underwriting types used with health insurance, with the main ones summaries below.

FULLY MEDICALLY UNDERWRITTEN (FMU)

Being fully medically 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 medical 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 medical conditions to be covered under certain circumstances.

If when applying the health insurance company wants to exclude a medical 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.

Key Points

  • 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 medical conditions affecting you in recent years, typically the last five years.

The difference with moratorium underwriting is that some medical 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.

Key Points

  • 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

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CONTINUOUS TERMS (CTME)

For those who have an existing health insurance policy it may be possible to move to a new insurance company and maintain their underwriting terms via the continuous terms option. This can apply if your existing policy was either fully underwritten, or was a moratorium policy.

If the new policy coverage is comparable with the previous or existing policy the new insurer may consider this, and at application you can declare the past underwriting information and exclusions and any medical conditions the policy is covering you for.

This will allow any covered medical conditions to continue to be covered, but also the new policy will exclude the same medical conditions the existing or previous policy excluded.

MEDICAL HISTORY DISREGARDED (MHD)

For group policies of a certain size, it may be possible with some insurers to obtain coverage for all pre-existing medical conditions in the group. This can provide much simpler management and administration for the policy. Note however that not all MHD terms offered by insurers are the same, and some insurers ask a number of health questions. Those that ask medical questions when setting up a MHD underwritten group typically will not cover all pre-existing conditions and exclude more serious or pending treatments. Some insurers however offer a comprehensive MHD terms and do not ask any health questions. You may contact us for assistance and to obtain a best form of medical history disregarded underwriting for your groups needs and circumstances.

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