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Difference Between Moratorium and Full Medical Underwriting in Health Insurance

When buying health insurance, understanding how insurers assess your medical history is key to avoiding surprises later. There are two common methods, namely, moratorium underwriting and full medical underwriting. It determines how pre-existing conditions are covered.

While one offers a quick, hassle-free policy with minimal health disclosures, the other provides clarity upfront by thoroughly evaluating your medical history before issuing coverage.

But which one is right for you? 🤔 In this article, we’ll break down the differences between moratorium and full medical underwriting to help you make an informed choice for your health and financial security!

Team Digit

What is Moratorium Period in Health Insurance?
What is Full Medical Underwriting in Health Insurance?
Difference Between Moratorium and Full Medical Underwriting
Which One is Better?
Frequently Asked Questions

What is Moratorium Period in Health Insurance?

The moratorium period in health insurance is a time limit of five years, after which your insurer cannot reject claims due to non-disclosure or misrepresentation of any PED unless there is proven fraud. This rule applies to your original sum insured in health insurance when you first bought the policy.

Difficult to understand? Here is an example:

You buy a health insurance policy with ₹5 lakh coverage and you have diabetes, which you did not disclose to your insurer.
After 5 years of continuous coverage, the insurer cannot reject a claim saying you didn’t disclose a past illness or PED unless it is proven fraud.
However, if you increase coverage to ₹7 lakh in the third year, the extra ₹2 lakh will have a new 5-year moratorium period from the date of enhancement.

#ProTip: Never hide your pre-existing health conditions with the insurance company to avoid claim rejections and long waiting periods.

How is the Moratorium Period Different From the Waiting Period in Health Insurance?

Well! In Moratorium, you are not asked for any details about any of your pre existing diseases, but in general, all the health ailments from the previous five years are excluded. Remember that each insurance provider has its own definition of Moratorium, and it differs from one to the other.

In simple words, the waiting period applies to specific conditions when the policy is new, while the moratorium period ensures long-term policyholders are protected from claim denials due to accidental non-disclosure.

Check: Waiting Period in Health Insurance

What is Full Medical Underwriting in Health Insurance?

Under Full Medical Underwriting, the applicant is required to disclose the complete medical history to the insurance provider, based on which the company decides the comprehensive health coverage or any of the below:

The pre-existing conditions would not be covered under your medical coverage. 
A “surcharge” might be added to your existing premium due to the increased probability of claim requirement.
The pre-existing conditions are accepted entirely. 
The application is rejected altogether.

Difficult to understand? Here is an example:

Imagine Ravi, a 40-year-old, applying for health insurance. The insurer follows full medical underwriting, meaning Ravi must provide a detailed health questionnaire about his medical history and undergo medical tests if required.

During the evaluation, the insurer found that Ravi had high blood pressure for the past 5 years. Based on this, the insurer might:

Cover him fully but with a higher premium due to increased risk.
Apply a waiting period (e.g.: 3 years) for claims related to high blood pressure.
Exclude hypertension-related claims altogether.

What is the Difference Between Moratorium and Full Medical Underwriting?

It might seem confusing for a few of us that what exactly is the difference between a moratorium and full medical underwriting. Well, both are a part of underwriting process but have a widely different meaning.

Let’s check out the striking differences between Moratorium and Full Medical Underwriting:

Differentiating Factor	Moratorium Period	Full Medical Underwriting
Meaning	The Moratorium Period has a time limit of five years, after which your insurer cannot reject claims due to non-disclosure or misrepresentation of any PED unless there is proven fraud	In Full Medical Underwriting, the applicant is required to disclose the complete medical history to the insurance provider
Medical History	You are not required to declare any pre-existing conditions while applying.	You must complete a comprehensive questionnaire stating your pre-existing diseases, if any.
Coverage for PED Condition	Covered only after 5 years of continuous policy coverage.	Insurers may cover, exclude or apply a waiting period based on risk assessment.
Claim Settlement Process	Since the insurance provider has never asked for your previous medical history, every time you make a claim, the company assesses your medical history before making a decision. Hence, the claim settlement might take longer.	Your insurance provider has already done the complete pre-existing assessment exercise at the time of application. Hence the claims process is much smoother and faster as compared to the moratorium process.
Premium Calculation	Premium is standard for all policyholders.	Premium is personalised based on health condition.
Suitable for	Those who want quick policy approval with minimum medical checks.	Those who want clear and upfront coverage terms in a policy.

Full Medical Underwriting or Moratorium: Which One is Better?

Full medical underwriting or moratorium, both approaches have their own features, advantages and disadvantages. There can't be an apple-to-apple comparison of the two, and instead, they need to be judged based on which one is better suited for you. 

Full medical underwriting is more suitable for a healthy person with no pre-existing diseases, while someone with a history of illness might consider the moratorium approach. However, as already said, each has its own features, and the decision entirely depends on the insured’s health and requirements. 

Best Choice? If you’re healthy and want long-term clarity, go for Full medical Underwriting and if you need a policy quickly, Moratorium might be the better fit. 🙂

To Sum Up:

Both Moratorium and Full Medical Underwriting serve the same purpose, providing health insurance, but take different routes. Full Medical Underwriting is your best bet if you value transparency, personalized premiums, and fewer claim disputes. However, if you prefer a hassle-free, quick policy issuance without disclosing your full medical history, Moratorium Underwriting offers a convenient alternative.

Choose wisely to secure a policy that truly meets your needs!

FAQs about Moratorium vs Full Medical Underwriting in Health Insurance

All

What are the disadvantages of Moratorium for pre-existing medical illnesses?

The disadvantage of the Moratorium approach for pre-existing conditions is that, as a general rule, all pre-existing conditions from the last 5 years are covered after a 2-year waiting period. In such a case, if you have a recurrence of a disease, you end up paying for healthcare from your pocket in the absence of health coverage.

What is Rolling Moratorium Cover?

A Rolling Moratorium Cover means that although pre-existing illnesses are excluded under the Moratorium cover, they will be covered after a two-year waiting period if no further symptoms occur.

What are moratorium underwriting's primary benefits?

There are several benefits of moratorium underwriting primary benefits. It includes:

You don't have to fill out a medical questionnaire or give your insurer any information about pre-existing medical conditions before purchasing a policy.
This implies that the first process is typically substantially faster compared to complete medical underwriting.

What advantages does comprehensive medical underwriting offer?

In order to determine what is covered right away and whether a pre-existing medical condition is excluded, you must submit information about your medical history when you select complete medical underwriting. Premiums are typically less expensive, and the claims procedure is typically faster.

How does Moratorium Underwriting handle pre-existing conditions?

Under Moratorium Underwriting, pre-existing conditions are not covered until you have been symptom-free and have not received treatment for a specified period, usually two years. If you meet these criteria, the condition may be covered.

How does Full Medical Underwriting handle pre-existing conditions?

Full Medical Underwriting assesses pre-existing conditions at the time of application. Based on the disclosed medical history, the insurer may choose to cover the condition, exclude it, or apply a higher premium.

What are the advantages of Full Medical Underwriting?

Full Medical Underwriting provides clarity from the outset. You know exactly what is covered and what is excluded, allowing for better financial planning. It may also offer coverage for certain pre-existing conditions that would be excluded under Moratorium Underwriting.

Which underwriting method is quicker to set up?

Moratorium Underwriting is generally quicker to set up because it does not require detailed medical history forms to be completed. The application process is more straightforward.

Can I switch from Moratorium Underwriting to Full Medical Underwriting?

Yes, it is possible to switch from Moratorium Underwriting to Full Medical Underwriting, but it will involve a new assessment of your medical history. This may result in changes to your coverage and premiums.

Which underwriting method is better for someone with a complex medical history?

Full Medical Underwriting may be better for someone with a complex medical history because it clearly outlines what is covered and allows for the possibility of including certain pre-existing conditions. However, it may come with higher premiums or specific exclusions.

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Difference Between Moratorium and Full Medical Underwriting in Health Insurance

Table of Contents

What is Moratorium Period in Health Insurance?

How is the Moratorium Period Different From the Waiting Period in Health Insurance?

What is Full Medical Underwriting in Health Insurance?

What is the Difference Between Moratorium and Full Medical Underwriting?

Full Medical Underwriting or Moratorium: Which One is Better?

FAQs about Moratorium vs Full Medical Underwriting in Health Insurance

What are the disadvantages of Moratorium for pre-existing medical illnesses?

What is Rolling Moratorium Cover?

What are moratorium underwriting's primary benefits?

What advantages does comprehensive medical underwriting offer?

How does Moratorium Underwriting handle pre-existing conditions?

How does Full Medical Underwriting handle pre-existing conditions?

What are the advantages of Full Medical Underwriting?

Which underwriting method is quicker to set up?

Can I switch from Moratorium Underwriting to Full Medical Underwriting?

Which underwriting method is better for someone with a complex medical history?

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