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Moratorium clause: what is it exactly about?

14 April 2020

 

Private health insurance is meant to cover people against unexpected and new medical conditions. Regarding pre-existing conditions (illness or condition that already existed prior the enrolment to a health insurance policy), they can have a different impact on your coverage depending on your medical insurance policy, and how your insurer assesses the risks related to them. In order to evaluate the risks, insurance companies need to receive your health history through a medical underwriting and decide if an exclusion is required or not.

 

What is the moratorium underwriting?

Unlike the full medical underwriting which requires a full set of questions about the applicant’s medical conditions, no information about pre-existing conditions is required with moratorium as anything pre-existing is excluded by default. With the moratorium underwriting, every claim will be checked by the insurer who will accept or not the reimbursement, depending on whether or not the medical condition was pre-existing.

Moratorium is traditionally the preferred underwriting option in the UK and Anglo-Saxon countries. In most other countries, insured will predominantly go for the medical questionnaire.

 

Is the moratorium policy interesting for me?

Many applicants select the moratorium clause, mainlly to avoid disclosing their personal health information, and to avoid the hassle of completing a medical questionnaire.

You are free to select the underwriting method that suits your needs best. However, we would generally advise a Moratorium to people with no pre-existing medical conditions only.

 

How about Foyer Global Health?

Foyer Global Health offers either full medical underwriting or moratorium. So you have complete freedom to choose the underwriting method which you like best.

 

As for the moratorium underwriting: we operate like most other insurers with a rolling moratorium underwriting, by excluding for 2 years all pre-existing conditions of the past 5 years, from the policy start date. After that period, they can be reconsidered for coverage if you did not receive any treatment or medication related to them, nor shown any symptoms of the pre-existing conditions.

As for the full medical underwriting: it will only take you a little bit more time to answer a questionnaire regarding your medical history (medication, chronic disease, teeth, vision etc). Your answers will be then reviewed by our medical staff who help us decide which conditions are covered or excluded.

 

Our recommendation:

As mentioned above, the choice of option will be based on what you think is most appropriate for your situation. Nonetheless, the moratorium underwriting is not an option that we particularly recommend to our clients, for the following 5 key reasons:

  1. Any pre-existing condition, even minor, will be automatically excluded from your cover
  2. If the moratorium underwriting enables a quicker process of your application, the waiting time will likely be longer for each claim due to the verification work of our dedicated teams.
  3. The information we receive through the medical questionnaire allows us to have a complete profile of your health status. With the moratorium, we do not have any upfront view of it. The insurance coverage will then be based on basic information such as your age etc. You may end up taking out an insurance policy that does not really reflect your expectations and needs.
  4. A claim may lead to a premium increase or exclusion, depending on our medical staff’s decision. You may therefore end up with a lack of clarity about your insurance cover.
  5. The more health related information you share with your insurance provider during the contracting phase, the fewer hurdle and frustration you will get in return when you ask for reimbursement.

 

Should you still be unsure what option to choose, then the best you can do contact us and ask all the needed questions. We will be happy to assist you and make sure you make the right decision according to your condition.

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