Explaining Underwriting Methods FMU vs Moratorium
As an FCA-authorised expert with over 800,000 customers helped, WeCovr understands that choosing the right private medical insurance in the UK can feel complex. A crucial first step is understanding underwriting—how insurers assess your health. This guide demystifies the two main methods: Moratorium and Full Medical Underwriting (FMU).
Clear guide to Full Medical Underwriting and Moratorium policies, how your medical history impacts coverage, pros and cons, and which option fits different risk profiles
When you apply for private medical insurance (PMI), the insurer needs to understand the level of risk they are taking on. This process is called underwriting. It’s how they evaluate your medical history to determine the terms of your policy, including what they will and won't cover, and how much your premium will be.
The choice between the two main underwriting methods—Moratorium and Full Medical Underwriting (FMU)—is one of the most significant decisions you'll make. It directly impacts your certainty of cover, the speed of your application, and how any future claims are handled.
Understanding this choice is key to finding a policy that truly serves your needs, ensuring there are no unwelcome surprises when you need to use your private health cover.
The Unmissable Rule: Pre-existing and Chronic Conditions
Before we dive into the methods, it's vital to grasp a fundamental principle of the UK private medical insurance market.
Standard private medical insurance is designed to cover acute conditions that arise after you take out your policy.
- An acute condition is a disease, illness, or injury that is likely to respond quickly to treatment and lead to a full recovery (e.g., a cataract, joint replacement, or hernia repair).
- A pre-existing condition is any ailment for which you have experienced symptoms, received medication, sought advice, or had treatment before your policy's start date.
- A chronic condition is a long-term health issue that cannot be cured, only managed (e.g., diabetes, asthma, high blood pressure, or Crohn's disease).
Standard PMI policies do not cover the ongoing management of chronic conditions. While some policies may offer cover for an acute flare-up of a chronic condition, the day-to-day management remains outside the scope of cover. Likewise, pre-existing conditions are always excluded, at least initially. The way they are excluded is the main difference between Moratorium and FMU underwriting.
Moratorium Underwriting: The "Wait and See" Approach
Moratorium underwriting is the most common method offered in the UK. It’s a "wait and see" approach that doesn't require you to disclose your full medical history upfront.
Instead, the insurer applies a blanket exclusion for any medical condition for which you have sought advice, received treatment, or had symptoms in a set period before your policy began—typically the last five years.
How Does Moratorium Underwriting Work?
The key concept to understand is the "rolling moratorium period," which is usually two years.
- Initial Exclusion: When you start the policy, any pre-existing condition from the past five years is automatically excluded.
- The Two-Year Rule: If you remain completely symptom-free, and do not need any treatment, medication, or medical advice for that specific condition for a continuous two-year period after your policy starts, the exclusion may be lifted. The condition could then become eligible for cover under the terms of your policy.
- Resetting the Clock: If you experience symptoms or seek advice for that condition during the two-year waiting period, the exclusion remains, and the two-year clock resets from the date of that latest consultation or symptom.
Real-Life Example: Sarah's Knee Pain
- Background: Sarah had physiotherapy for knee pain 18 months before she bought a moratorium PMI policy.
- Initial Cover: Her policy automatically excludes anything related to her knees.
- Scenario A - No Flare-ups: Sarah's knee is fine. She goes for two full, continuous years without any knee pain, medication, or GP visits for it. After this two-year period, if she develops a new problem with her knee, it would likely be covered.
- Scenario B - A Flare-up: One year into her policy, Sarah's knee hurts again after a long walk, and she visits her GP. This visit resets the two-year clock. She will now have to wait another two continuous years from the date of this GP visit before her knee condition could be considered for cover.
Pros and Cons of Moratorium Underwriting
| Pros of Moratorium | Cons of Moratorium |
|---|---|
| ✅ Fast and Simple Application: No lengthy health forms to complete. | ❌ Lack of Certainty: You don't know what's covered until you claim. |
| ✅ Less Intrusive: You don't need to recall and list your entire medical past. | ❌ Slower Claims Process: The insurer investigates your history at the point of a claim. |
| ✅ Conditions Can Become Covered: Offers a pathway for past issues to gain cover over time. | ❌ The 'Reset' Rule: Any minor symptom or check-up can restart the 2-year waiting period. |
Who is Moratorium Underwriting Best For?
Moratorium policies are often a good fit for:
- Individuals who are generally fit and well with no recent medical issues.
- People who haven't seen a doctor for anything significant in the last five years.
- Those who value a quick and hassle-free application process above absolute certainty of cover from day one.
Full Medical Underwriting (FMU): The "Cards on the Table" Approach
Full Medical Underwriting (FMU) is the opposite of a moratorium. It's a comprehensive process where you provide the insurer with your complete medical history upfront by filling out a detailed health questionnaire.
The insurer reviews your declarations, and they may (with your permission) contact your GP to get more details about your health history. Based on this full picture, they will offer you a policy with specific, named exclusions clearly listed in your policy documents.
How Does Full Medical Underwriting Work?
- Full Disclosure: You answer a series of questions about your health, from past surgeries and consultations to medications and symptoms. Honesty and thoroughness are critical.
- Insurer Assessment: The underwriting team analyses your information to identify any conditions that pose a higher risk.
- Clear Terms Offered: The insurer provides you with a quote and policy certificate that explicitly states any and all exclusions. For example, it might say, "Exclusion: All conditions related to the left ankle and treatment for asthma." These exclusions are usually permanent.
Real-Life Example: David's Back Problem
- Background: David had a slipped disc five years ago, which has since resolved but required specialist consultation at the time.
- Application: On his FMU application, he declares this history in detail.
- Insurer's Decision: The insurer's underwriting team reviews the information. They decide to offer him a policy but with a permanent exclusion for "any treatment, consultations, or diagnostics related to the lumbar spine."
- Outcome: David knows from the very beginning that his back is not covered. However, he has complete peace of mind that any new, unrelated acute condition (like a hernia or gallbladder issue) will be covered, subject to his policy terms. The claims process for these new conditions will be fast and straightforward.
Pros and Cons of Full Medical Underwriting
| Pros of FMU | Cons of FMU |
|---|---|
| ✅ Total Clarity and Certainty: You know exactly what is and isn't covered from day one. | ❌ Lengthy Application: Requires completing detailed and intrusive medical questionnaires. |
| ✅ Faster Claims Process: As underwriting is done upfront, claims are generally processed quickly. | ❌ Exclusions are Often Permanent: Unlike a moratorium, there's usually no pathway for an exclusion to be removed. |
| ✅ Potentially Cheaper: If you're healthy, providing a full, clean medical history can sometimes result in a lower premium. | ❌ Relies on Your Memory: Forgetting to declare a condition (non-disclosure) can invalidate your policy or a future claim. |
Who is Full Medical Underwriting Best For?
FMU is often the preferred choice for:
- Individuals who want absolute certainty about their cover before they commit.
- People with a complex or significant medical history who want to know exactly where they stand.
- Those switching from another company's FMU policy, as they can often carry their existing terms across (see 'CPME' below).
FMU vs. Moratorium: A Head-to-Head Comparison
Choosing between the two depends entirely on your personal circumstances and priorities. This table breaks down the key differences to help you decide.
| Feature | Moratorium Underwriting | Full Medical Underwriting (FMU) |
|---|---|---|
| Application Process | Quick and simple. No medical forms to fill in. | Detailed and can be slow. Requires completing a full health questionnaire. May involve contacting your GP. |
| Clarity of Cover | Ambiguous. You only discover what is excluded for certain when you make a claim. | Crystal clear from day one. All exclusions are listed in writing on your policy documents. |
| Cover for Pre-existing Conditions | Excluded for the first 2 years. Can become eligible for cover if you have no symptoms, treatment, or advice. | Explicitly excluded from the start, usually on a permanent basis. |
| Speed of Claims | Can be slower. The insurer needs to investigate your medical history (typically the last 5 years) to assess the claim. | Generally faster. The underwriting work is already done, so the insurer just needs to confirm the claim is valid. |
| Intrusiveness | Low during application, but high at the point of a claim when your history is investigated. | High during application, as you must disclose your full medical history. |
| Best For... | People who are generally healthy, have no recent medical history, and want a fast start to their policy. | People who want 100% certainty, have a known medical history they want clarity on, or are switching from a previous FMU policy. |
How Your Medical History Shapes Your Choice
Let's explore some common scenarios to see which underwriting method might be more suitable.
Scenario 1: Young, Fit, and Healthy
- Profile: You're under 35, exercise regularly, and haven't needed to see a GP for anything other than a common cold in the last five years.
- Best Option? Moratorium is often an excellent choice. The application is fast, and since you have no pre-existing conditions to worry about, the "ambiguity" of cover isn't a major concern. An FMU policy could also be a great, and possibly cheaper, option as you can prove your clean bill of health. An expert PMI broker like WeCovr can run quotes for both to find the most cost-effective solution.
Scenario 2: A Minor, Resolved Condition from Years Ago
- Profile: You had a bout of sciatica four years ago, which was treated with a few sessions of physiotherapy and hasn't returned since.
- Best Option? Moratorium could be ideal. The condition is automatically excluded, but you only have to go one year without symptoms or treatment before the two-year trouble-free period is complete. After that, your sciatica could be covered. With FMU, it might be permanently excluded.
Scenario 3: A Recent or Recurring Minor Condition
- Profile: You suffer from occasional eczema flare-ups and were prescribed a cream by your GP eight months ago.
- Best Option? This is where it gets tricky. On a Moratorium policy, anything skin-related would be excluded. Each time you get a prescription, the two-year clock resets. This means your eczema is unlikely to ever be covered. In this case, FMU provides more clarity. The insurer will apply a clear exclusion for "eczema and related skin conditions." You know where you stand, and you have certainty that a new, unrelated issue will be covered without hassle.
Scenario 4: A Significant Past Medical Event
- Profile: You had heart surgery seven years ago or were treated for cancer and have been in remission for six years.
- Best Option? Full Medical Underwriting is almost always the recommended path here. It allows you to have an open conversation with the insurer. They will assess your specific case and provide a policy with clear, unambiguous exclusions. This avoids the immense stress and uncertainty of making a claim on a moratorium policy, only to have it declined after a lengthy investigation into your complex history.
Switching Insurers? Understanding Your Underwriting Options
Many people switch private medical insurance providers to get a better deal, but it's crucial to do this correctly to maintain your level of cover.
- Continued Personal Medical Exclusions (CPME): If you are switching from one FMU policy to another, you can usually apply on a 'CPME' basis. This means your new insurer agrees to accept the same medical exclusions you had on your old policy. The huge advantage is that any new condition you developed while on your old policy will be covered by the new one. You don't start from scratch.
- Switching with Moratorium: If you switch from one moratorium policy to another, the new insurer will typically apply their own five-year moratorium period. However, some insurers may allow a 'continued moratorium' where they honour the waiting period you already served with your previous insurer.
Navigating a switch can be complex. This is where an independent PMI broker proves invaluable. They can ensure your switch is managed seamlessly, preventing any accidental loss of cover for conditions you thought were protected.
The WeCovr Advantage: Expert Guidance at No Extra Cost
Choosing between FMU and Moratorium is not a decision to be taken lightly. As this guide shows, the right choice is deeply personal and depends on your health, your attitude to risk, and your priorities.
This is where WeCovr can help. As an FCA-authorised broker with high customer satisfaction ratings, our role is to provide impartial, expert advice tailored to you.
- We listen: We take the time to understand your medical history and what you need from a policy.
- We compare: We compare policies and underwriting terms from a wide panel of the UK's leading insurers.
- We clarify: We explain the pros and cons, ensuring you understand exactly what you are buying.
- We support: We help you with the application process and are there to assist you for the life of your policy.
Our advice comes at no cost to you. Furthermore, as a WeCovr customer, you receive complimentary access to our AI-powered calorie and nutrition tracking app, CalorieHero, and can benefit from discounts on other insurance products, such as life or home insurance.
Proactive Health: A Strategy for Better Cover and Wellbeing
While underwriting deals with your past health, your future health is in your hands. A healthier lifestyle not only improves your quality of life but can also reduce your long-term insurance costs and the likelihood of developing conditions that might become exclusions.
The NHS recommends adults aim for:
- At least 150 minutes of moderate-intensity activity a week (like brisk walking, cycling, or swimming).
- A balanced diet as reflected in the Eatwell Guide, rich in fruits, vegetables, and whole grains.
- 7 to 9 hours of quality sleep per night, which is crucial for physical and mental recovery.
Many modern PMI providers actively support this. They often include wellness programmes, digital GP access, mental health support, and discounts on gym memberships, rewarding you for taking control of your health.
Frequently Asked Questions (FAQ)
Do I need to declare a condition I had as a child on a PMI application?
What happens if I forget to declare something on an FMU application?
Is one type of underwriting cheaper than the other?
Can an exclusion on my policy ever be removed?
Your Next Step to a Clearer Health Insurance Future
Choosing the right underwriting method is the foundation of a robust private medical insurance policy. It dictates the certainty, speed, and smoothness of your healthcare journey. While a Moratorium policy offers speed and simplicity, FMU provides unparalleled clarity and peace of mind.
Don't navigate this crucial decision alone. Let our team of friendly, expert advisors do the hard work for you. We'll help you compare the UK's best PMI providers and find the perfect underwriting match for your health and budget.
Contact WeCovr today for your free, no-obligation quote and take the first step towards smarter private health cover.
Related guides
Why private medical insurance and how does it work?
What is Private Medical Insurance?
Private medical insurance (PMI) is a type of health insurance that provides access to private healthcare services in the UK. It covers the cost of private medical treatment, allowing you to bypass NHS waiting lists and receive faster, more convenient care.How does it work?
Private medical insurance works by paying for your private healthcare costs. When you need treatment, you can choose to go private and your insurance will cover the costs, subject to your policy terms and conditions. This can include:• Private consultations with specialists
• Private hospital treatment and surgery
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Your premium depends on factors like your age, health, occupation, and the level of cover you choose. Most policies offer different levels of cover, from basic to comprehensive, allowing you to tailor the policy to your needs and budget.
Questions to ask yourself regarding private medical insurance
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Benefits offered by private medical insurance
Private medical insurance provides numerous benefits that can significantly improve your healthcare experience and outcomes:Faster Access to Treatment
One of the biggest advantages is avoiding NHS waiting lists. While the NHS provides excellent care, waiting times can be lengthy. With private medical insurance, you can often receive treatment within days or weeks rather than months.
Choice of Consultant and Hospital
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Better Facilities and Accommodation
Private hospitals typically offer superior facilities, including private rooms, better food, and more comfortable surroundings. This can make your recovery more pleasant and potentially faster.
Advanced Treatments
Private medical insurance often covers treatments and medications not available on the NHS, giving you access to the latest medical advances and technologies.
Mental Health Support
Many policies include comprehensive mental health coverage, providing faster access to therapy and psychiatric care when needed.
Tax Benefits for Business Owners
If you're self-employed or a business owner, private medical insurance premiums can be tax-deductible, making it a cost-effective way to protect your health and your business.
Peace of Mind
Knowing you have access to private healthcare when you need it provides invaluable peace of mind, especially for those with ongoing health conditions or concerns about NHS capacity.
Private medical insurance is particularly valuable for those who want to take control of their healthcare journey and ensure they receive the best possible treatment when they need it most.
Important Fact!
We can look at a more suitable option mid-term!
Why is it important to get private medical insurance early?
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