Saturday, September 5, 2009

Moratorium Underwriting

There was report recently in the newpaper about a baby not able to get Medishield cover due to a pre-existing health condition. From my experience, CPF Board has been the most lenient underwriter for a Shield plan and yet still not able to get the cover, I doubt any other insurer will want to accept the baby under normal circumstances.

I felt that it was so unfair that the baby got totally rejected instead of an exclusion for a government scheme. It seems to me that they are more profit oriented than for the people. They probably should follow Aviva lead in allowing Moratorium Underwriting.Under Moratorium Underwriting, cover starts almost immediately as no underwriting is required. Any new, unexpected medical conditions arising after the start of insured person’s coverage will be covered.

Pre-existing conditions can also be covered after a continuous period of 5 years from commencement date, provided that the insured person has not in respect of that particular pre-existing condition:
a) experienced symptoms or;
b) sought advice or tests from a Physician or Specialist or Alternative Medicine Provider
(including checkups for that medical condition ) or;
c) required treatment or medication or;
d) received treatment or medication

There are also a list of medical conditions that are permanently excluded such as Stroke, Heart Attack, Paralysis, etc

The strength of Moratorium underwriting is that the policyholder is almost guaranteed a medical coverage even with certain pre-existing conditions. I had seen many people deprived of medical coverage due to insurers rejection and sometimes I feel that it was unfair for the policyholder. Example, a person with Hep B, got rejected totally for insurance coverage

Some advisers prefer to use Moratorium Underwriting for the clients because they feel that there might be some medical condition that the client may not know and they will surely be covered after 5 years. For me, I prefer to use full underwriting for my clients because I rather that my clients be very sure what is covered and what is not instead of the insurance company deciding what is covered and what is not at the point of claim. For certain conditions, I'll strongly suggest the Moratorium underwriting.

I experienced people who approached me about Moratorium underwriting after being rejected by other insurers and I have to inform them that Aviva will not accept moratorium underwriting if their Life or Health Insurance application have been previously declined or deferred for any application, renewal or reinstatement of life, health or any other insurance policy.

What I wrote here are very basic stuffs and of my best understanding. There are many other things that you may need to know if you are to apply through this underwriting option. I suggest that you ask your adviser about it.

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