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Medical Underwriting For Individuals

Insurers use medical underwriting to decide whether to offer applicants private health, life insurance or income protection cover and on what terms. There are different types of medical underwriting and this has important implications for what your policy will cover and how much it will cost.

What is medical underwriting?

Medical underwriting is a process of assessing how much risk is involved in insuring someone on the basis of how likely they are to make a claim. As part of the underwriting process, an individual’s health information may be used in making two decisions: whether to offer or deny coverage and what premium rate to set for the policy. It is important for you to understand what medical conditions you are not covered for.

During medical underwriting, insurers look at an applicant’s medical history, including illnesses and injuries they’ve suffered in the past, to decide:

  • whether to offer them private health, life or income protection insurance
  • what their policy will cover and what it will exclude
  • how much it will cost – the premium
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Medical underwriting explained

When you apply for an insurance plan with us, we assess your medical history, including any medical conditions or injuries you have suffered in the past. It helps us decide the terms on which we can offer you cover.

Insurance is designed to cover the unexpected, and so policies don’t typically cover pre-existing conditions unless this is specifically agreed. Medical underwriting helps ascertain what, if any, pre-existing medical conditions will be covered and at what cost. If you’re applying for a policy that includes medical underwriting, you’ll be asked to complete a health questionnaire. It will ask you about aspects of your health and lifestyle such as:

  • whether you smoke
  • your age
  • any medical conditions you’ve had in the past or currently have – these are called ‘pre-existing conditions’
  • your height and weight
  • your general health

The insurer might also ask for information from your doctor, and in some cases, you may need to have a medical examination.

Why is it called underwriting?

The term underwriter originated from the practice of having each risk-taker write their name under the total amount of risk they were willing to accept for a specified premium. Although the mechanics have changed over time, underwriting continues today as a key function in the financial and insurance world.

Medical underwriting pros and cons

Advocates of medical underwriting say the process keeps health, life and income protection insurance premiums as low as possible for most customers.

A common criticism of underwriting is that someone with a pre-existing condition may be asked to pay more to cover the higher risk of illness or have the condition excluded from the cover offered.

Diseases that could make you uninsurable include serious conditions such as Type 1 diabetes, Alzheimer’s or dementia.

There are also conditions that may result in exclusions, such as allergies, high blood pressure or high cholesterol. We would normally be able to offer cover but with an exclusion.

What is a pre-existing condition?

A pre-existing condition is an illness or injury you’ve already received medications, advice or treatment, or for which you have experienced symptoms of – or tests, medication, treatment or advice for – before taking out your health insurance policy. It might be a chronic condition – one that’s ongoing and can’t be cured, such as diabetes – or an illness you’ve had in the past, such as cancer. Even if you have actually never sought medical advice, we might class something as pre-existing condition when you first claim (depending on your medical assessment).

Having a pre-existing condition doesn’t mean you can’t take out international insurance – it just means you won’t be covered for that condition unless it has been agreed. So for example, if you suffer from diabetes, that probably won’t be covered under your plan. But you could still make a claim if you were diagnosed with cancer, or broke your arm.

Similarly, you can get life insurance or income protection if you have a pre-existing condition, but depending on your policy, it might not pay out if your death is related to that condition. In the case of William Russell international life insurance or income protection, we may agree to cover you for those conditions or they may be excluded, depending on your plan.

Medical underwriting options

The two most common methods of medical underwriting are known as moratorium underwriting, a relatively simple process, and full medical underwriting, a more in-depth analysis of a client’s health information.

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Moratorium underwriting

Pre-existing conditions may be covered if you haven’t consulted a doctor about them, or taken medication for them or had any symptoms for a certain amount of time (five years). These plans are more expensive than plans with full medical underwriting. However, some conditions will never become eligible for cover (check with us).

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Full medical underwriting

Your health plan will not cover the treatment of pre-existing medical conditions unless you’ve told us about them & we agree to cover them. A plan with moratorium underwriting or switch underwriting is slightly more expensive than a health plan with full medical underwriting.

What is switch underwriting?

This means that any special terms or exclusions applicable to your health plan with a previous provider will be transferred to your plan with William Russell. This type of underwriting is offered where you already have a policy in place which has been underwritten in the past (or moratorium). Switch underwriting is also known as ‘continued personal medical exclusions’, or CPME. Plans with switch underwriting are more expensive than plans with full medical underwriting.

What is insurance with no medical underwriting?

Medical history disregarded (MHD) insurance covers all pre-existing and new conditions, but it’s only available to companies with a minimum number of employees, not to individuals.

What Lee, our underwriting manager, says
"Understanding what medical underwriting is important because you need to know exactly what will and what won't be covered from the start date, giving you certainty and a clear understanding of your insurance policy."

How to choose the best medical underwriting option for you

Moratorium underwriting

With moratorium underwriting, medical conditions (and related conditions) that existed up to five years before the start date of your health plan will not be covered.

Consider moratorium underwriting:
If you have suffered from a medical condition in the past, which is not a chronic OR a serious condition, for which you want cover, should it recur in the future. Medical conditions will be assessed at the point of claim to confirm whether they are pre-existing (so members may not know until they go to claim that a condition is not covered). It can also mean a slightly longer claim turnaround as our team have to check the medical history at that stage to make sure it’s not a pre-existing condition.

Full medical underwriting (FMU)

With this option, you will have to complete a health declaration in respect of your medical history, and based on the information you declare, we will advise you on the outset if there are any specific exclusions that will apply to your cover.

Consider full medical underwriting

  • To get a premium discount – our fully underwritten premiums are cheaper than the moratorium premiums.
  • You must apply for FMU if you are applying for individual cover aged 55+, and for groups if aged 70+.
  • If you have suffered from any type of serious and/or chronic medical condition. For example, if you have ever suffered from any form of cancer, any type of heart or circulatory disorder, or any medical condition for which it is generally accepted that you should regularly attend a regular consultation for an ongoing medical treatment or advice (including check-ups) or take drugs, medicines or injections, and follow a special diet.

Choose the best medical underwriting option for you

If you have suffered from any type of serious or chronic medical condition, talk to us to complete a fully underwritten application form and make a full declaration about your medical history. In that way, we can discuss any exclusions that will apply to your cover before you join the plan and you can decide whether or not you wish to proceed. Talk to us if you need more information or help.

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