Moratorium and Full Medical Underwriting 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

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.

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!