Full Medical Underwriting (FMU)

Function

For individuals and small groups, international health insurers generally offer two routes of risk assessment: full medical underwriting and moratorium. Under FMU the applicant completes a detailed health questionnaire; where necessary the insurer requests medical reports. On this basis it decides before inception whether to accept the risk at standard terms, with a premium loading, with individual exclusions (“special conditions”) or not at all. AXA Global Healthcare describes the method as “fully underwritten”: the insurer asks about the medical history and confirms any exclusions in writing. The advantage is transparency – the insured person knows from day one what is and is not covered. The disadvantages are the effort involved and the fact that, as market practice, exclusions are permanent unless the insurer agrees to review them on request after a symptom-free period.

Distinctions

Unlike the moratorium, which shifts the assessment to the point of claim, under FMU the risk decision is complete before any premium is paid. Compared with medical history disregarded, which is only available to corporate groups, FMU is more restrictive but cheaper. Undeclared pre-existing conditions remain excluded; an incomplete declaration may moreover breach the duty of disclosure and entitle the insurer to cancel the policy or decline a claim. In Switzerland, supplementary health insurance under the VVG applies the same principle in the form of the “Vorbehalt” (reservation), whereas basic KVG insurance accepts applicants without any health assessment.

Practical Note

FMU suits people with a known, clearly delimited history who want legal certainty about the scope of cover, and older applicants to whom some insurers no longer offer a moratorium. Exclusions and loadings should be recorded verbatim on the insurance certificate so that they can be carried over on a later change of insurer via continued personal medical exclusions.