Difference between Moratorium and Full Medical Underwriting
Given the skyrocketing healthcare prices worldwide, the last thing you want is to fall sick. But then that’s the nature of it. You never know when you might need health assistance. In such unforeseen circumstances, the hospital bill on top of poor health makes things worse.
In times like those, if you have health insurance, it saves you from not just the financial shock but also all the mental pressure that such times can bring.
What is Moratorium Period in Health Insurance?
Before talking about "What is Moratorium in Health insurance", it is imperative to know “What is a Pre-Existing Condition”. as per the definition, a Pre-Existing Disease (PED) is an ailment that you were suffering from and diagnosed within 48 months or less before you bought your insurance policy.
While most policies do cover pre-existing diseases, they do that only after a certain waiting period.
Moratorium underwriting is an insurance type wherein the insurer excludes all the pre-existing conditions from the last five years for a certain period, much like the waiting period and covers them post that.
How is Moratorium Period different from the usual 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.
What is Full Medical Underwriting?
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.
What is the Difference between Moratorium and Full Medical Underwriting
Let’s check out the striking differences between Moratorium and Full Medical Underwriting
| Differentiating Factor | Moratorium | Full Medical Underwriting |
| 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. |
| Waiting Period | You are not covered for up to two years for any pre-existing illnesses that you might have been suffering from 5 years before taking the policy. | Pre-existing conditions mostly aren’t covered for a certain waiting period. However, it differs among companies, and the coverage extent or situations may vary. |
| 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. |
Is the Moratorium Underwriting option Better?
Both the 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.
For a hale and healthy person with no pre-existing diseases, Full Medical Underwriting is more suitable, 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.
Frequently Asked Questions
What are the disadvantages of Moratorium for pre-existing medical illnesses?
The disadvantage of Moratorium approach for pre-existing condition is that, as a general rule all pre-existing conditions from the last 5 years covered after a 2-year waiting period. In such a case, if you have the recurrence of a disease, you end up paying for healthcare from your pocket, in the absence of a health cover.
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.