Buying international health insurance can be quite a hard. It requires quite a bit of thought and is a complex decision for most people as it is a matter of financial security and not to mention the sizeable investment that it involves. Amongst all the factors that need to be considered in this process, let’s look at one that is a bit forgotten but very important: the “Medical Underwriting Terms”. The method of underwriting – “moratorium” or “full medical” – could potentially affect the outcome of your application, your premium and your future claim pay-outs, so it is very important to get to understand this.
What is Medical Underwriting?
It refers to to the process of the health insurance provider determining the risk, the price and terms on which a person can be covered under a policy. It forms the basis of a health insurance contract. Basically the insurer assesses your health condition and based on that decides if and on what terms the insurer is prepared to insure you. There are different ways of doing that and knowing the difference is important because it affects the outcomes quite dramatically. There are 2 important ways: the first one is called “FMU” or “Full Medical Underwriting” and the second one is referred to as “Moratorium Underwriting”.
Full Medical Underwriting
This method requires a person to declare their past and present health conditions essentially through a medical questionnaire at the time of application of insurance. Upon evaluation by the health insurer there could be four potential outcomes should there be any pre-existing health conditions declared:
- These conditions are excluded from coverage (hence expenses related to those are for your own account)
- A “loading” of the premium may be applied to compensate for the extra risk/costs that these conditions bring
- The conditions are accepted
- Cover is declined totally
Moratorium
This method is quite different and will help you if you have had certain conditions in the past that no longer affect you. Under this method of underwriting, all pre-existing conditions have a waiting period that needs to be met, after which these conditions are covered. This means that you should not have received any treatment insured condition in the waiting period after which the insurer can begin to provide cover for you. This way of underwriting is easier since usually conditions (need to be declared at the time of application of insurance (hence no questionnaires to fill out). Read the small print though because sometimes an insurer may exclude to cover certain conditions or illnesses altogether such as heart diseases, kidney failure, and dementia to name a few.
Which method is better?
There really is no concrete answer to this. It all depends on your specific requirements and moreover on your health status. If you have past health conditions for which you would like to seek cover then you may want to look at moratorium underwriting. Full medical underwriting is more suited for a person who does not have pre-existing or past health conditions. Full medical underwriting has the benefit of not leaving anything to fate and you being totally certain of your coverage right from the start of the policy.
It does not stop at the coverage levels of course. You also need to do some further comparison of the policies and consider the price differences and other differences in coverage levels. You can conveniently do so in detail, line-by-line, on our Insurance Market platform.
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