UK Health Insurance: Moratorium vs. Full Underwriting

Understanding Moratorium vs. Full Medical Underwriting: Which is Best for Your UK Private Health Insurance?

UK Private Health Insurance: Understanding Moratorium vs. Full Medical Underwriting – Which is Best for You?

In the intricate world of UK private health insurance (PMI), one of the most critical decisions you'll face isn't just about choosing your cover level or hospital list, but about the underwriting method your policy will employ. This fundamental choice—between Moratorium Underwriting and Full Medical Underwriting—can profoundly impact what you're covered for, the claims process, and even the cost of your premiums.

For many Britons, the National Health Service (NHS) remains the cornerstone of healthcare, and rightly so. It's a national treasure providing comprehensive care at the point of need. However, as the UK population ages and demand for services increases, the NHS faces unprecedented pressures, leading to longer waiting times for consultations, diagnostics, and elective surgeries. Recent data from NHS England shows that over 7.6 million people were waiting for hospital treatment in May 2024, with a significant proportion waiting over 18 weeks. This reality has led a growing number of individuals and families to consider private medical insurance, seeking quicker access to specialists, a choice of consultants, and often, more comfortable treatment environments.

The Association of British Insurers (ABI) reported that the number of people covered by PMI increased by 6.7% in 2022, reaching 7.2 million, the highest level in over a decade. This growth underscores the increasing reliance on private healthcare options. But before diving into policy specifics, understanding underwriting is paramount. It's how insurers assess your health risks and determine what conditions they will or won't cover. Getting this wrong can lead to unwelcome surprises at the point of claim.

This comprehensive guide will demystify Moratorium and Full Medical Underwriting, explore their advantages and disadvantages, and help you determine which method is best suited to your individual circumstances, ensuring you make an informed decision for your health and financial peace of mind.

What is Private Medical Insurance Underwriting and Why is it Necessary?

At its core, underwriting in insurance is the process by which an insurer evaluates the risk of insuring a particular person or asset. For private medical insurance, this means assessing your health history to decide whether to offer you cover, at what price, and with what exclusions.

Why is this process so crucial? Insurers operate on the principle of pooled risk. Premiums from many policyholders contribute to a fund that pays out claims for the few who need it. If an insurer were to cover every pre-existing condition for everyone, the system would quickly become unsustainable. Underwriting allows insurers to:

1. Assess Risk: Understand the likelihood of you making a claim based on your past and current health.
2. Determine Eligibility: Decide if they can offer you cover at all.
3. Set Premiums: Calculate a fair price for your policy, reflecting your individual risk profile.
4. Define Exclusions: Identify specific conditions or circumstances that will not be covered by the policy.

The two primary methods of underwriting for individual private medical insurance in the UK are Moratorium Underwriting and Full Medical Underwriting. Each approaches this risk assessment in a distinct way, leading to different experiences for the policyholder.

Deep Dive: Moratorium Underwriting – The 'Wait and See' Approach

Moratorium underwriting is often presented as the simpler and quicker option for obtaining private medical insurance. It's a "wait and see" approach, meaning the insurer doesn't ask for your full medical history upfront when you apply. Instead, they rely on a look-back period to determine coverage for pre-existing conditions.

How Moratorium Underwriting Works

Under a moratorium policy, the insurer will typically look back at your medical history for a specific period, usually 5 years prior to the start date of your policy. During this 5-year "look-back" period, any medical condition for which you have experienced symptoms, received treatment, sought advice, or taken medication will be considered a pre-existing condition.

The crucial element of moratorium underwriting is the "symptom-free" period. For any of these pre-existing conditions to potentially become covered in the future, you must go a continuous period of typically 2 years after the policy start date without experiencing any symptoms, requiring treatment, seeking advice, or taking medication for that specific condition. If you manage to complete this 2-year symptom-free period, that particular condition (and any related conditions) may then be covered by your policy.

However, if you experience symptoms or require treatment for a pre-existing condition within that 2-year symptom-free period, the clock for that condition effectively resets. The 2-year symptom-free period must be continuous. This can mean that some pre-existing conditions may never become covered if they are recurring or chronic.

Key Characteristics of Moratorium Underwriting:

• No Upfront Medical Questionnaire: You typically won't need to complete a detailed medical questionnaire or provide GP reports at the application stage. This speeds up the application process significantly.
• Assessment at Claim Stage: The assessment of whether a condition is pre-existing (and therefore excluded) only happens when you make a claim. At this point, the insurer will ask for your medical history relating to the condition you're claiming for.
• Automatic Exclusions: Any condition you've had in the 5 years prior to your policy start date is automatically excluded initially.
• Potential for Future Coverage: If you remain symptom-free for a continuous 2-year period after your policy starts, those specific pre-existing conditions might then be covered.
• Related Conditions: Be aware that if a condition is deemed pre-existing, any related conditions are often also excluded. For example, if you had symptoms of high blood pressure, then heart disease might be considered a related condition.

Advantages of Moratorium Underwriting:

• Speed and Simplicity of Application: It's the quickest way to get cover. You can often get a quote and policy set up online in minutes, without the need for lengthy forms or waiting for GP reports.
• Less Invasive: You don't have to disclose your entire medical history upfront, which some people prefer for privacy reasons.
• Ideal for Healthy Individuals: If you have a very clean medical history with no recent ailments, this method can be very straightforward.
• Potential for Future Cover: Unlike FMU which locks in exclusions, moratorium offers a pathway for some pre-existing conditions to become covered over time, provided they cease to be problematic.

Disadvantages of Moratorium Underwriting:

• Uncertainty at Claim Stage: This is the biggest drawback. You won't know for sure if a pre-existing condition is covered until you make a claim. This can be stressful and lead to unexpected denied claims if your history isn't as clean as you thought or if conditions resurface.
• Risk of Denied Claims: If a claim relates to a condition you had within the 5-year look-back period, and you haven't completed the 2-year symptom-free period, your claim will be denied. This can be frustrating if you were unaware of the nuances.
• Not Suitable for Recurring/Chronic Conditions: For conditions that are chronic or frequently recur (e.g., certain musculoskeletal issues, mental health conditions, allergies), it's highly unlikely they will ever meet the 2-year symptom-free requirement, meaning they will remain permanently excluded.
• Broader Initial Exclusions: Because the insurer doesn't have your full history, they often apply broader initial exclusions based on the look-back rule.

Real-Life Example:

• Scenario 1 (Success): Sarah had a bout of sciatica five years ago that required physiotherapy. She hasn't had any symptoms or treatment for it in the past five years. She takes out a moratorium policy. Two and a half years into her policy, she develops new sciatica symptoms. Because her previous bout was outside the 5-year look-back, and the new symptoms are distinct, it would likely be covered.
• Scenario 2 (Exclusion): Mark had shoulder pain and received steroid injections 18 months before taking out a moratorium policy. Six months into his policy, the shoulder pain returns. When he tries to claim, the insurer requests his medical records and identifies the pre-existing nature of the shoulder pain within the 5-year look-back. Since he hasn't had a 2-year symptom-free period since the policy started, his claim for the shoulder pain will be denied. It will remain excluded until he achieves that continuous 2-year symptom-free period.

It is absolutely crucial to understand that even with a moratorium policy, standard private medical insurance in the UK does not cover chronic conditions, regardless of the underwriting method. The "symptom-free" period only allows for acute conditions that have ceased to be problematic to potentially become covered. We will delve into the critical distinction between acute and chronic conditions shortly.

Deep Dive: Full Medical Underwriting (FMU) – The 'Know Before You Go' Approach

Full Medical Underwriting (FMU) is the more traditional and thorough method of assessing your health history for private medical insurance. Unlike moratorium, FMU aims to establish a clear picture of your health before your policy even begins.

How Full Medical Underwriting Works

With FMU, when you apply for a policy, you will be required to complete a comprehensive medical questionnaire. This form asks detailed questions about your past and present health, including any conditions you've had, treatments you've received, medications you take, and any symptoms you've experienced.

Based on your answers, the insurer may do one or more of the following:

1. Offer Standard Terms: If your medical history is very clean, they may offer you cover without any specific exclusions related to your health.
2. Apply Specific Exclusions: For certain pre-existing conditions, they may state upfront that these specific conditions (and often related conditions) will be permanently excluded from your policy. These exclusions are usually listed clearly in your policy documents.
3. Apply a Loading: If your medical history indicates a higher risk but not a full exclusion, the insurer might apply a "loading" to your premium, meaning you pay a higher price than someone with a cleaner health record.
4. This can take time as they need your consent to contact your GP.
5. Decline Cover: In rare cases, if your medical history presents an unmanageable risk, the insurer may decline to offer you cover altogether.

Key Characteristics of Full Medical Underwriting:

• Detailed Upfront Disclosure: You provide a comprehensive medical history at the application stage. Honesty is paramount here.
• Clear Exclusions from Day One: If any conditions are excluded, you will know exactly what they are before you take out the policy. These exclusions are typically permanent.
• GP Reports May Be Required: Be prepared for the insurer to request access to your medical records, which can add time to the application process.
• Tailored Policy: The policy you receive is specifically tailored to your individual health profile.
• No 'Symptom-Free' Period: Once a condition is excluded, it remains excluded. There's no mechanism like moratorium's 2-year symptom-free rule to get it covered later.

Advantages of Full Medical Underwriting:

• Certainty and Peace of Mind: This is the biggest advantage. You know exactly what is and isn't covered before you need to make a claim. This eliminates unpleasant surprises and allows you to plan accordingly.
• Specific Exclusions: If an exclusion is applied, it's usually very specific, rather than a broad exclusion for anything within a look-back period.
• Clear Understanding: You have a clear understanding of your policy's limitations from the outset, allowing you to make informed decisions about your healthcare.
• Potentially Lower Premiums: For individuals with a very healthy history, FMU might lead to slightly lower premiums compared to moratorium, as the insurer has a precise risk assessment.

Disadvantages of Full Medical Underwriting:

• Longer and More Complex Application Process: Completing detailed medical forms and waiting for GP reports can make the application process lengthy, sometimes taking weeks or even months.
• More Invasive: You have to disclose your full medical history, which some people find intrusive.
• Permanent Exclusions: If a condition is excluded upfront, it's usually permanent. There's no opportunity for it to become covered later, even if you become symptom-free.
• Potential for Higher Premiums or Loadings: If you have a more complex medical history, you might face higher premiums or a significant number of exclusions.

Real-Life Example:

• Scenario 1 (Clear Cover): David had mild asthma as a child but hasn't had any symptoms or treatment for 20 years. He opts for FMU. He declares his past asthma on the form. The insurer reviews it and, given the long symptom-free period, agrees to cover him for all conditions, including asthma, without exclusion. He knows exactly where he stands.
• Scenario 2 (Known Exclusion): Maria had a knee injury two years ago that required surgery. She applies for FMU and declares this. The insurer assesses her history and decides to offer her a policy but with a specific permanent exclusion for her knee and any related conditions. Maria knows that if her knee pain returns, she will need to use the NHS or self-fund, but all other new, acute conditions will be covered.

Just like with moratorium, it's paramount to reiterate: standard UK private medical insurance, even with Full Medical Underwriting, does not cover chronic conditions. The exclusions applied are for pre-existing acute conditions, or conditions that might become chronic.

Critical Distinction: Pre-existing Conditions and Chronic Conditions in UK PMI

This is arguably the most misunderstood aspect of private medical insurance and a point of frequent contention for policyholders. It is absolutely crucial to grasp this fundamental principle:

Standard UK private medical insurance policies are designed to cover acute conditions that arise after your policy begins, or acute pre-existing conditions that become covered through moratorium's symptom-free period.

They are NOT designed to cover chronic conditions, regardless of when they developed.

What is a Pre-existing Condition?

In the context of PMI, a pre-existing condition is generally defined as any disease, illness, or injury for which you have experienced symptoms, received medical advice, diagnosis, or treatment, or taken prescribed medication, within a specified period (e.g., 5 years for moratorium) before the start date of your insurance policy.

What is an Acute Condition?

An acute condition is a disease, illness, or injury that is likely to respond quickly to treatment and return you to your previous state of health. Examples include a broken bone, appendicitis, or a sudden infection. PMI aims to get you treated for these promptly.

What is a Chronic Condition?

A chronic condition is a disease, illness, or injury that has one or more of the following characteristics:

• It continues indefinitely (or has no known cure).
• It comes and goes repeatedly.
• It requires long-term management or control.
• It requires long-term monitoring or observation.
• It requires long-term rehabilitation.
• It requires palliative care.

Examples of chronic conditions include diabetes, asthma, epilepsy, arthritis, Crohn's disease, long-term mental health conditions (like schizophrenia or bipolar disorder), and some forms of persistent back pain.

Why Are Chronic Conditions Excluded?

The exclusion of chronic conditions is a fundamental principle across virtually all standard UK private medical insurance policies. This isn't a loophole; it's a structural necessity for the insurance model to be sustainable. If insurers had to cover indefinite, ongoing treatments for lifelong conditions, the cost of premiums would be astronomically high, making policies unaffordable for the vast majority. The NHS, funded by general taxation, is the primary provider of care for chronic conditions in the UK.

Therefore, if you have a chronic condition, your private medical insurance will not cover the ongoing management, medication, or recurrent flare-ups of that condition, even if you were diagnosed after the policy started. It might cover an acute exacerbation if that specific exacerbation is treated quickly and returns you to your previous stable, chronic state, but the underlying chronic condition itself remains outside the scope of cover. Always clarify this with your insurer or broker if you have a specific chronic condition.

This distinction between acute and chronic, and the explicit exclusion of the latter, is a non-negotiable rule in UK private health insurance and must be understood clearly before purchasing a policy.

Comparing Moratorium and Full Medical Underwriting: A Head-to-Head

To help you visualise the differences, here's a direct comparison of Moratorium and Full Medical Underwriting:

This table highlights that while moratorium offers speed and simplicity upfront, it trades that for uncertainty at the point of claim. FMU demands more effort initially but provides clear peace of mind regarding what your policy will cover.

Which Underwriting Method is Best for You? Factors to Consider

Deciding between moratorium and full medical underwriting is a personal choice, with no single "best" option. Your ideal choice will depend on your individual circumstances, medical history, risk tolerance, and priorities.

Consider the following factors:

1. Your Recent Medical History

• Very Healthy with no recent issues (past 5 years): Moratorium might be a good fit. If you truly have had no symptoms, advice, or treatment for any condition in the last 5 years, moratorium is likely to be straightforward, and you may find everything covered.
• Some minor, resolved issues (past 5 years): Moratorium could still work, but be aware of the 2-year symptom-free rule. If you had a sprained ankle three years ago that's fully recovered, it might become covered. But if you have recurring back pain, it's unlikely to ever be covered under moratorium.
• Complex or recurring medical history (past 5 years): Full Medical Underwriting is generally recommended. While you might face exclusions, at least you'll know exactly what they are upfront. This avoids the stress and disappointment of a denied claim later.
• Known chronic conditions: Neither will cover your chronic condition. However, FMU allows you to declare it and understand exactly what related conditions might also be excluded, giving you clarity.

2. Your Desire for Certainty

• Prefer certainty and transparency from day one: Choose Full Medical Underwriting. You'll know precisely what your policy covers and what it excludes before you ever pay your first premium.
• Comfortable with a "wait and see" approach: Moratorium might be acceptable if you prefer a quicker application and are prepared for potential exclusions to be revealed at the claim stage.

3. Your Timeline and Willingness for Disclosure

• Need cover quickly and prefer less initial paperwork: Moratorium is the faster option, requiring minimal upfront disclosure.
• Willing to invest time in the application process and disclose full history: Full Medical Underwriting involves more detailed forms and potentially GP reports, which can take time.

4. Your Budget and Cost Considerations

• Moratorium policies sometimes start with slightly higher premiums to account for the unknown risks. However, they can be more affordable if you have a very clean recent history and no unexpected claims.
• Full Medical Underwriting can lead to "loadings" (increased premiums) for specific identified risks, but for very healthy individuals, it might be marginally cheaper as the insurer has full visibility of the risk.

5. Your Risk Tolerance

• Risk-averse: Full Medical Underwriting offers more security, as you have a definitive understanding of your cover from the start.
• Higher risk tolerance: Moratorium can be attractive if you're willing to accept the uncertainty at the claim stage for the benefit of a simpler application.

Table: Which Underwriting Method Suits You?

Ultimately, the goal is to secure a policy that genuinely meets your needs and provides the peace of mind you seek. Rushing into a decision without fully understanding the implications of your chosen underwriting method can be a costly mistake.

The Application Process: What to Expect

Regardless of the underwriting method, the application process for private medical insurance generally follows these steps:

1. Gather Information: Have your personal details, and if opting for FMU, your comprehensive medical history readily available. This includes dates of diagnoses, treatments, medications, and names of consultants.
2. Get Quotes: You can do this directly from insurers, but for a truly comprehensive comparison and expert guidance, using an independent broker like WeCovr is highly recommended. We can compare plans from all major UK insurers.
3. Choose Your Underwriting Method: Based on your circumstances and the guidance provided, you'll select either Moratorium or Full Medical Underwriting.
4. Complete Application:
   • Moratorium: You'll typically answer a few simple questions about recent major medical events and declare you understand the moratorium terms.
   • Full Medical Underwriting: You'll complete a detailed health questionnaire. Be honest and thorough; omissions can invalidate your policy.
5. Underwriter Review (for FMU): The insurer's underwriting team will review your application. They may request a GP report, for which they'll need your signed consent.
6. Policy Offer: The insurer will then issue a policy offer, outlining your chosen cover, premiums, and any specific exclusions (for FMU) or confirmation of moratorium terms.
7. Review and Accept: Carefully read your policy documents, especially the sections on underwriting, exclusions, and claims. If you have any questions, raise them before accepting.
8. Policy Activation: Once you accept and make your first payment, your policy becomes active.

Honesty is the Best Policy: It cannot be stressed enough how vital it is to be completely honest and transparent during the application process, especially with Full Medical Underwriting. Failure to disclose relevant medical information, even if unintentional, can lead to your policy being declared void, and any claims being denied. Insurers have the right to investigate your medical history at the point of claim, and discrepancies will come to light.

Group Schemes: A Different Underwriting Landscape

It's worth a brief mention that if you're fortunate enough to have private medical insurance offered through your employer as part of a group scheme, the underwriting method might be different and often more favourable, particularly for those with pre-existing conditions.

Many group schemes offer Medical History Disregarded (MHD) underwriting. Under MHD, the insurer largely disregards your medical history, meaning pre-existing conditions (excluding chronic conditions, which are still typically not covered) are covered from day one. This is because the risk is spread across a large group of employees, making it actuarially viable for the insurer.

If MHD is available, it is often the most advantageous form of underwriting, especially if you have a medical history that would otherwise lead to exclusions under individual moratorium or FMU policies. However, MHD is usually only available for corporate policies and is not typically an option for individual policies purchased directly.

The Invaluable Role of an Expert Broker

Navigating the complexities of private medical insurance, particularly the nuances of underwriting, can be daunting. This is where an independent, expert broker becomes an invaluable asset.

At WeCovr, we specialise in guiding individuals and families through the UK private health insurance market. Here’s how we can help:

• Expert Guidance on Underwriting: We take the time to understand your unique medical history and preferences, explaining in plain English which underwriting method (Moratorium or Full Medical Underwriting) is most suitable for you and why. We ensure you fully grasp the implications of your choice.
• Comprehensive Market Comparison: We work with all the major UK private medical insurance providers. This allows us to compare a wide range of policies, ensuring you see the best options tailored to your specific needs and budget, rather than just what one insurer offers.
• Finding the Right Cover: Beyond underwriting, we help you understand different cover levels, hospital networks, outpatient limits, and excess options, building a policy that truly fits your requirements.
• Streamlined Application Process: We assist you with the application forms, ensuring all necessary information is provided accurately. For FMU, we can liaise with insurers regarding GP reports, helping to smooth out the process.
• Advocacy and Support: Should questions or issues arise during the policy term or at the point of claim, we can act as your advocate, providing support and clarification.
• Ongoing Review: Your health needs change over time. We can help you review your policy periodically to ensure it remains the right fit for your evolving circumstances.

Using a broker like us costs you nothing extra – our fees are paid by the insurers, yet you benefit from our expertise and access to the whole market. We pride ourselves on providing impartial advice, ensuring you find the right health insurance solution for peace of mind.

Conclusion: Making an Informed Choice for Your Health

Choosing the right private medical insurance policy involves more than just comparing price tags. The underwriting method – Moratorium or Full Medical Underwriting – is a foundational decision that will dictate the scope of your cover and your experience when you need to make a claim.

• Moratorium Underwriting offers a quick, less intrusive application process but comes with uncertainty regarding pre-existing conditions until a claim is made and a 2-year symptom-free period is achieved. It’s often best for those with a very clean recent medical history and a preference for speed.
• Full Medical Underwriting requires a more detailed upfront disclosure and a longer application, but it provides absolute clarity on what is and isn't covered from day one, offering unparalleled peace of mind. It’s highly recommended for anyone with a more complex or recent medical history.

Remember, a universal truth across standard UK private medical insurance policies is that chronic conditions are not covered. This fundamental principle ensures the sustainability of the insurance model, with the NHS remaining the primary provider for long-term health management.

By understanding the intricacies of each underwriting method, considering your personal health history, and leveraging the expertise of an independent broker like WeCovr, you can make a truly informed decision. This will ensure your private medical insurance policy is a valuable asset, providing prompt access to high-quality care when you need it most, without unexpected hurdles. Invest the time now to secure the right cover for your future health.

Sources

• Office for National Statistics (ONS): Inflation, earnings, and household statistics.
• HM Treasury / HMRC: Policy and tax guidance referenced in this topic.
• Financial Conduct Authority (FCA): Consumer financial guidance and regulatory publications.