How PMI Underwriting Really Works
Choosing private medical insurance in the UK can feel complex, but understanding one key concept—underwriting—makes it much simpler. As an FCA-authorised PMI broker that has helped arrange over 900,000 policies of various kinds, WeCovr is here to demystify this crucial choice for you and your family.
Understand the difference between full medical underwriting, moratorium, and switch options. The underwriting you choose affects price and future claims. — Martin Lewis
When you apply for private health cover, the insurer needs to assess the risk of you making a claim. This assessment process is called underwriting. It determines what the policy will and won't cover based on your medical history, and it directly influences the price you pay.
Think of it like this: the insurer is agreeing to cover the cost of future, unforeseen medical issues. To do that fairly, they need to know about past medical issues. The way they gather and use this information is what defines the type of underwriting.
In the UK, there are two main types for new policies:
- Full Medical Underwriting (FMU)
- Moratorium Underwriting (Mori)
There's also a third option, Switch underwriting, for those who already have a policy and want to move to a new provider. Getting this choice right from the start is perhaps the most important decision you'll make when buying private medical insurance.
A Crucial Point: Pre-existing and Chronic Conditions Are Not Covered
Before we dive into the details of underwriting, let's be crystal clear on a fundamental rule of standard private medical insurance in the UK:
PMI is designed to cover acute conditions that arise after your policy begins.
It is not designed to cover:
- Pre-existing conditions: Any illness, injury, or symptom you have (or have had) before the start of your policy.
- Chronic conditions: Illnesses that are long-term and cannot be fully cured, such as diabetes, asthma, arthritis, or high blood pressure. These require ongoing management rather than a one-off treatment to return you to your previous state of health.
An acute condition, by contrast, is a disease, illness, or injury that is likely to respond quickly to treatment and lead to a full recovery. For example, a cataract operation, a hernia repair, or treatment for a joint injury are all acute.
Understanding this distinction is vital. No matter which underwriting option you choose, cover for chronic conditions will be excluded. The underwriting process simply determines how the insurer identifies and applies exclusions for your specific pre-existing conditions.
Full Medical Underwriting (FMU): The "Cards on the Table" Approach
Full Medical Underwriting is exactly what it sounds like. You provide the insurer with your complete medical history upfront by filling out a detailed health questionnaire.
You'll be asked about past consultations, treatments, investigations, and any symptoms you've experienced, often going back at least five years. You must be completely honest and thorough. The insurer may also ask for your permission to contact your GP for more information or to see your medical records.
Based on this information, the insurer's underwriting team will decide what to do. They might:
- Cover you in full: If you have a clean bill of health.
- Apply exclusions: They might state in writing that specific conditions or body parts will not be covered. For example, if you had knee trouble three years ago, they might place an exclusion on "all conditions related to the right knee."
- Charge a higher premium: For certain minor historical issues, they might cover you but increase the price.
- Decline your application: This is rare but can happen in cases of very complex or recent medical history.
The Pros of Full Medical Underwriting
- Certainty: You know from day one exactly what is and isn't covered. There are no grey areas or surprises when you need to make a claim.
- Potentially Cheaper: If you are in good health with a limited medical history, FMU can often be cheaper than a moratorium policy because the insurer has a complete picture of the risk they are taking on.
- Possibility of Covering Some Pre-existing Conditions: In some cases, an insurer might agree to cover a minor pre-existing condition after a certain number of years have passed without symptoms or treatment, or they may offer cover for it in exchange for a higher premium. This is decided on a case-by-case basis.
The Cons of Full Medical Underwriting
- Lengthy Application: The health questionnaire can be long and require you to recall medical details from years ago. It takes more time and effort.
- Intrusive: Some people feel uncomfortable sharing their entire medical history.
- Permanent Exclusions: The exclusions applied are often permanent and will remain on your policy for life, unless you specifically ask for them to be reviewed (and the insurer agrees).
Real-Life Example: Sarah and FMU
Sarah, a 45-year-old teacher, decides to get PMI. Ten years ago, she had physiotherapy for a shoulder injury after a fall. On her FMU application, she declares this. The insurer reviews her history and, because it was a long time ago and she has had no further issues, they offer her a policy with no exclusions for her shoulder. She has complete peace of mind.
Who is FMU Good For?
- Individuals and families in good health with a straightforward medical history.
- People who value absolute clarity and want to know exactly what's covered from the outset.
- Those who have had a historical medical issue but want to see if an insurer might be willing to cover it.
Moratorium Underwriting (Mori): The "Wait and See" Approach
Moratorium underwriting is the most common type chosen in the UK because it's simpler and faster to set up.
With a moratorium policy, you don't complete a full health questionnaire. Instead, the policy automatically excludes treatment for any pre-existing medical conditions you have had in a set period before the policy started (typically the last five years).
The "moratorium" is a waiting period, usually two years. If you go for two continuous years after your policy starts without experiencing any symptoms, needing any treatment, medication, or advice for that pre-existing condition, the insurer may then agree to cover it in the future.
However, if the condition comes back or you need advice for it during that two-year moratorium period, the "clock" resets, and you'll need to go another two years trouble-free before it can be considered for cover.
The Pros of Moratorium Underwriting
- Quick and Easy: The application process is very fast as there are no medical forms to fill in. You can often get cover in place the same day.
- Less Intrusive: You don't need to disclose your entire medical history at the start.
- Pre-existing Conditions Can Become Eligible for Cover: Unlike the often-permanent exclusions on an FMU policy, a moratorium offers a clear pathway for pre-existing conditions to become covered over time.
The Cons of Moratorium Underwriting
- Uncertainty at the Point of Claim: The main drawback. You don't know for sure if a condition will be covered until you make a claim. At that point, the insurer will investigate your medical history to see if it's a new condition or related to something you had before.
- Potentially Slower Claims: The claims process can be delayed while the insurer requests medical information from your GP to determine if your condition is pre-existing.
- Can Be More Expensive: Because the insurer has less information upfront, they are taking on a slightly higher, unknown risk. This is often reflected in a slightly higher premium compared to an equivalent FMU policy for a healthy individual.
Real-Life Example: David and Moratorium
David, a 50-year-old accountant, took out a moratorium policy. Four years before, he'd seen his GP for occasional back pain. In the first year of his PMI policy, his back pain returns. When he tries to claim for physiotherapy, the insurer investigates and finds it's a pre-existing condition. The claim is declined. The two-year moratorium "clock" for his back pain now resets to zero.
Who is Moratorium Good For?
- People who want to get cover in place quickly without a lot of paperwork.
- Those who haven't had any significant medical issues in the last five years.
- Individuals who are happy with the "wait and see" approach and understand that claims will involve a review of their medical history.
Comparison: Full Medical Underwriting vs. Moratorium Underwriting
| Feature | Full Medical Underwriting (FMU) | Moratorium Underwriting (Mori) |
|---|---|---|
| Application Process | Detailed health questionnaire. Can be slow. | No medical questions. Fast and simple. |
| Upfront Knowledge | Total Clarity. You know exactly what is and is not covered from Day 1. | Uncertainty. Cover is determined at the point of claim. |
| Pre-existing Conditions | Usually excluded permanently in writing. | Automatically excluded for a set period (e.g., 2 years). May become eligible for cover later. |
| Claims Process | Generally faster, as underwriting is already done. | Can be slower, as insurer needs to investigate medical history. |
| Cost | Often cheaper for healthy individuals. | Can be slightly more expensive due to the unknown risk for the insurer. |
| Best For... | People who want certainty and have a clear medical history. | People who want a quick start and are comfortable with the "wait and see" approach. |
An expert PMI broker, such as WeCovr, can walk you through both scenarios with your personal circumstances in mind, helping you compare quotes from the best PMI providers to see which underwriting type works out better for you financially and practically.
Switch Underwriting: Changing Your Insurer Without Losing Cover
What if you already have private medical insurance but you're not happy with the service, the premium has become too expensive, or another provider is offering a better deal? You might be hesitant to switch, fearing you'll lose cover for conditions that developed while you were with your original insurer.
This is where Switch underwriting comes in. It's a special method designed to make it easy to move from one PMI provider to another.
The most common form is Continued Medical Exclusions (CME). With CME, your new insurer agrees to take you on with the same medical exclusions you had on your previous policy. Any new conditions that you developed and were covered for under your old policy will continue to be covered by your new one.
You effectively carry your underwriting terms from your old policy to your new one. You don't get cover for things that were previously excluded, but importantly, you don't gain new exclusions for conditions that have arisen since you first took out cover.
The Pros of Switch Underwriting
- Continuity of Cover: You can switch insurers to get a better price or better benefits without worrying about losing cover for conditions you've developed.
- Access to a Competitive Market: It allows you to shop around each year to ensure you're getting the best value, preventing you from being "locked in" to one provider.
- Simple Process: It's usually a straightforward declaration form confirming your current policy details.
The Cons of Switch Underwriting
- Exclusions Carry Over: Any exclusions on your original policy will follow you to the new one. You don't get a "fresh start".
- Not Always Available: Not all insurers offer switch terms, and you usually need to have been with your previous insurer for a certain period.
- Benefit for Benefit: Your new policy must typically have a comparable or lower level of benefits than your old one. You can't usually switch to a much more comprehensive policy.
Real-Life Example: The Henderson Family and Switching
The Henderson family have had a PMI policy with Insurer A for five years. During that time, Mrs Henderson developed a minor allergy which was covered and treated. Their renewal price from Insurer A is now £300 per month. They shop around and find a similar policy with Insurer B for £250 per month. By using a Switch/CME basis, they move to Insurer B. The original exclusions from Insurer A are carried over, and crucially, Mrs Henderson's allergy remains covered by her new policy.
Who is Switch Underwriting Good For?
- Anyone with an existing private medical insurance UK policy who wants to find a better price or change provider.
- People who have developed medical conditions while insured and want to protect their continuity of cover.
How Your Underwriting Choice Affects Price and Claims
The link between underwriting, price, and claims is direct.
- Price: An insurer's main goal is to price a policy accurately based on risk. With FMU, the risk is known, so the price can be tailored precisely. A healthy 30-year-old might get a very low price. A 50-year-old with a history of joint pain might get a policy with a knee exclusion and a standard price. With Moratorium, the risk is less known, so the insurer hedges its bets with a price that reflects the "average" risk, which can be slightly higher.
- Claims: With FMU, the claims process is generally smooth. The decision of whether to cover something was effectively made when you took out the policy. With Moratorium, the underwriting happens at the point of claim. This means you submit your claim, and then the insurer's team begins its investigation. They will likely request access to your medical records to check if your symptoms are new or linked to a pre-existing condition from the five years before your policy began. This can add time and stress to the process.
Proactive Health Management: A Wise Investment
While insurance is there for when things go wrong, taking proactive steps for your health is the best strategy of all. A healthier lifestyle can reduce your likelihood of needing to claim, which in turn helps to keep your future renewal premiums more manageable.
With NHS waiting lists in England reaching 7.54 million cases in September 2023, according to NHS England figures, taking control of your health has never been more important.
Simple Steps for Better Health
- Balanced Diet: Focus on whole foods, fruits, vegetables, and lean proteins. A balanced diet can help prevent a range of chronic conditions. As a bonus for our clients, when you take out a policy with WeCovr, we provide complimentary access to our AI-powered calorie and nutrition tracker, CalorieHero, to make healthy eating easier.
- Regular Exercise: The NHS recommends at least 150 minutes of moderate-intensity activity a week. This could be brisk walking, cycling, or swimming. Regular activity is proven to boost mental and physical wellbeing.
- Prioritise Sleep: Aim for 7-9 hours of quality sleep per night. Poor sleep is linked to a host of health problems, including weakened immunity and high blood pressure.
- Manage Stress: Chronic stress can have a significant physical impact. Techniques like mindfulness, yoga, or simply spending time in nature can make a huge difference.
Taking out a PMI policy is a great way to protect your health, and combining it with a healthier lifestyle is the ultimate winning formula. Furthermore, clients who purchase PMI or life insurance through us may be eligible for discounts on other types of cover, like home or travel insurance.
Making the Right Choice for You
There is no single "best" type of underwriting; the right choice depends entirely on your personal circumstances, your attitude to risk, and your priorities.
| If you value... | Then consider... | Because... |
|---|---|---|
| Certainty and Clarity | Full Medical Underwriting (FMU) | You'll know precisely what's covered from day one. |
| Speed and Simplicity | Moratorium Underwriting (Mori) | The application is quick and doesn't require a full medical declaration. |
| Saving Money on an Existing Policy | Switch Underwriting | You can move to a cheaper provider without losing cover for conditions you've developed. |
Navigating these options can be daunting. This is why working with an independent, FCA-authorised broker is so highly recommended. We can provide impartial advice, compare the whole market for you, and ensure the policy you choose is perfectly aligned with your needs and budget. Our clients consistently give us high satisfaction ratings for our clear, helpful, and transparent service.
Do I need to declare mental health conditions on a PMI application?
What happens if a condition I had many years ago comes back?
Can I change my underwriting type from Moratorium to FMU later?
Is private medical insurance worth it if it excludes my pre-existing conditions?
Ready to explore your options and find the right private health cover for your needs?
The team of experts at WeCovr is here to help. We provide free, no-obligation advice and can compare policies and prices from all the leading UK insurers to find the perfect fit for you.
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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
• Diagnostic tests and scans
• Physiotherapy and rehabilitation
• Mental health treatment
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
Just ask yourself:👉 Are you concerned about NHS waiting times for treatment?
👉 Would you prefer to choose your own consultant and hospital?
👉 Do you want faster access to diagnostic tests and scans?
👉 Would you like private hospital accommodation and better food?
👉 Do you want to avoid the stress of NHS waiting lists?
Many people don't realise that private medical insurance is more affordable than they think, especially when you consider the value of faster treatment and better facilities. A great insurance policy can provide peace of mind and ensure you receive the care you need when you need it.
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
You can choose your preferred consultant and hospital, giving you more control over your healthcare journey. This is particularly important for complex treatments where you want a specific specialist.
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?
👉 Many people are very thankful that they had their private medical insurance cover in place before running into some serious health issues. Private medical insurance is as important as life insurance for protecting your family's finances.👉 We insure our cars, houses, and even our phones! Yet our health is the most precious thing we have.
Easily one of the most important insurance purchases an individual or family can make in their lifetime, the decision to buy private medical insurance can be made much simpler with the help of FCA-authorised advisers. They are the specialists who do the searching and analysis helping people choose between various types of private medical insurance policies available in the market, including different levels of cover and policy types most suitable to the client's individual circumstances.
It certainly won't do any harm if you speak with one of our experienced insurance experts who are passionate about advising people on financial matters related to private medical insurance and are keen to provide you with a free consultation.
You can discuss with them in detail what affordable private medical insurance plan for the necessary peace of mind they would recommend! WeCovr works with some of the best advisers in the market.
By tapping the button below, you can book a free call with them in less than 30 seconds right now:
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