Insurance Term of the Week: Moratorium Underwriting

What is Moratorium Underwriting? 

Moratorium Underwriting in health insurance is a process in which you do not need to fill in a medical declaration but instead join on a plan understanding that if you (or your dependents) have experienced symptoms or been treated for a medical condition in a specific time period prior to joining the plan these conditions will be excluded. Such conditions will then be eligible for cover, after you have been a member for a number of years in a row and secondly, once you have been totally free of any medical treatment, medical advice, drugs or special diets regarding that condition for a period of the number of years consecutively.  

This form of underwriting is not offered by all insurance providers and gives a great alternative to those seeking cover who may not suit plans which have full medical underwriting. 

How does Moratorium work? 

Moratorium underwriting refers to a type of underwriting in which after a period of time has elapsed of continuous cover, pre-existing medical conditions will become eligible for benefit. Pre-existing conditions will be covered after a set period only if you haven’t consulted with any doctor or specialist for advice or treatment or if you haven’t suffered any symptoms for that medical condition or any related condition for a continuous period determined by the Insurer. 

Real-life Examples of How Moratorium Underwriting Works 

Example 1 

John underwent an operation on his arm. Then he takes part in a healthcare program. The question is will he get coverage for any further medical treatment after his operation such as medical check-ups or physiotherapy? 

If John chooses moratorium underwriting, then during his first set period of years as a member, the coverage for any further treatment related to the operation of his arm or any medical condition that was the cause for the operation would not be included. 

However, if he does not get medically treated for his arm issue (including any check-ups after his arm operation) for the set period of years consecutively, his insurance provider would cover him as long as he needed any further treatment afterwards. 

Example 2 

Three weeks following Kathy’s enrollment of her healthcare scheme, she visits the physician and discovers that she is diagnosed with a pulmonary condition. As her pulmonary abnormality must have progressed prior to her enrollment, would she get coverage for treatment of this medical condition? 

Yes, Kathy would get the medical coverage if she was not mindful of this pulmonary condition at the time she signed up. Meanwhile, if Kathy was getting medical treatment for her hypertension prior to her enrollment and was later diagnosed with one of the specified conditions mentioned in the section, “Other medical conditions that her insurance provider will not cover”, then she would not get insured for any of these medical conditions.