What Is Moratorium Underwriting? A Plain-English Guide for UK Employers

If you have started looking at business health insurance, you have almost certainly encountered the word underwriting, followed by a list of options that nobody explains properly.

Moratorium underwriting is the most common underwriting basis for group health insurance policies in the UK. It is likely to be the default option offered when you request a quote. Understanding exactly how it works will help you make a more informed decision when setting up cover for your team.

This guide explains moratorium underwriting in plain English.

What does underwriting mean in health insurance?

Underwriting is the process by which an insurer assesses risk and decides what it will and will not cover. In the context of group health insurance, underwriting specifically refers to how the insurer handles employees’ medical histories, particularly pre-existing conditions.

There are three main underwriting bases used in UK group health insurance: Moratorium underwriting, Full Medical Underwriting, and Medical History Disregarded. Each takes a different approach to pre-existing conditions, and each has implications for cost, administration and claims.

What is moratorium underwriting?

Under moratorium underwriting, employees do not disclose their medical history when joining the scheme. Instead, the policy automatically applies a blanket exclusion to any condition that an employee has experienced; symptoms, treatment, medication, diagnosis or medical advice; in the five years prior to the start of the policy.

That exclusion is not permanent. If the employee completes two consecutive years without any further symptoms, treatment, medication or medical advice related to that condition while on the policy, the exclusion is automatically lifted and the condition becomes covered going forward.

This is the defining characteristic of moratorium underwriting: automatic exclusion of recent conditions, followed by automatic reinstatement once a qualifying period has passed.

“Moratorium is the starting point for most group policies we arrange, particularly for smaller businesses. It keeps things simple; nobody fills in medical forms when they join, which makes onboarding much easier. The trade-off is that employees need to understand that conditions they have had recently will not be covered straight away.”
Charlie Cousins, Director, Hooray Health & Protection

How does the two-year reinstatement rule work in practice?

For a previously excluded condition to become covered, the employee must complete two continuous years during which they have had no symptoms, required no treatment, taken no medication and received no medical advice relating to that condition. If at any point during those two years the employee experiences symptoms or seeks treatment, the clock resets.

Here is an example. An employee joins a company health insurance scheme in January 2025. In the three years before joining, they had episodes of lower back pain for which they received physiotherapy. Under moratorium underwriting, their lower back pain is excluded for the first two years of the policy. If they reach January 2027 without any recurrence of symptoms or treatment, the exclusion lifts and any future lower back pain would be covered by the policy.

If they had physiotherapy for back pain in November 2026, the two-year clock would reset from that point.

What counts as a pre-existing condition under moratorium underwriting?

The exclusion applies to any condition for which an employee has received symptoms, treatment, medication, diagnosis or medical advice in the five years before the policy started. That means:

• A diagnosed condition currently being managed; 
• A condition that was diagnosed and treated but is now resolved; 
• Symptoms for which no formal diagnosis was given but which prompted a GP visit;
• Medication prescribed for a condition; 
• A condition for which the employee suffered symptoms of even if no treatment was received or medical advice sought;

The five-year look-back and the two-year reinstatement period are standard across most insurers offering moratorium underwriting, though some variations exist. Always confirm the specific terms with your insurer or broker.

What are the advantages of moratorium underwriting?

• No disclosure required; employees do not need to complete medical history questionnaires when joining, which simplifies administration.
• Lower administrative burden; the policy applies standard terms across the group, with no individual negotiations or assessments to manage.
• Conditions can become covered over time; the two-year reinstatement rule means employees with a history of manageable conditions can eventually gain full cover.
• Typically lower premiums than Medical History Disregarded; because pre-existing conditions are excluded, the insurer carries less risk and prices accordingly.
• Well suited to new schemes; moratorium is the default basis for most insurers when a new group health policy is set up.

What are the disadvantages of moratorium underwriting?

• Uncertainty at the point of claim; employees may not know exactly which conditions are excluded until they try to claim. This can cause frustration if they assumed they had comprehensive cover.
• Conditions need to be traced back; at claim time, the insurer will assess whether the condition being claimed for was present in the five years before the policy started.
• The reinstatement period requires vigilance; an employee who does not realise their clock has reset because they saw a GP for related symptoms may believe their condition is covered when it is not yet.
• May not suit employees with complex health histories; for employees with multiple pre-existing conditions, full medical underwriting may give more certainty about what is and is not covered.

“The conversation about underwriting is one of the most important ones we have with employers when setting up a scheme. Moratorium works well for most businesses, but it is not right for everyone. We always take time to explain the options properly so the employer can make an informed decision.”
Charlie Cousins, Director, Hooray Health & Protection

How does moratorium underwriting compare to the alternatives?

Full medical underwriting

Under full medical underwriting, each employee completes a detailed medical history questionnaire at the point of joining. The insurer reviews this and agrees specific exclusions for each individual. The advantage is clarity: employees know from day one exactly what is and is not covered. The disadvantage is the administrative burden and the potential for employees to be uncomfortable disclosing their medical history.

Medical History Disregarded (MHD)

Under MHD, all employees are covered for all conditions; including pre-existing ones; from the first day of the policy. There is no look-back period and no exclusions based on medical history. MHD commands a higher premium and is typically only available for groups above a minimum size threshold. Our existing guide on the site explains MHD in full detail.

Choosing between the three options

The right underwriting basis depends on your team profile, budget and priorities. These are general considerations; speaking to a broker will give you a personalised recommendation based on your specific circumstances. For a full side-by-side comparison of all three options, see our separate guide.

When does moratorium underwriting work best?

Moratorium is generally the right starting point for smaller businesses arranging group health insurance for the first time, businesses with a younger and predominantly healthy workforce, and businesses that want competitive premiums and are comfortable with the trade-off of initial exclusions for recent conditions.

What should employers tell employees about moratorium underwriting?

Clear communication is essential. Employees who do not understand the exclusion rules may make claims that are declined and feel that the benefit has let them down, even when the policy has been set up correctly.

At minimum, employers should communicate that any condition experienced in the five years before the policy started will initially be excluded; that excluded conditions can become covered after two consecutive years without symptoms or treatment; and that employees should speak to the broker or insurer before making a claim if they are unsure whether a condition will be covered.

Hooray Health and Protection can help businesses with employee communications when setting up or renewing schemes.

How can Hooray Health and Protection help?

As an independent broker, we place group health insurance policies across the whole market. We will advise on which underwriting basis is most appropriate for your business, compare premiums and cover across multiple insurers, and manage the setup and ongoing administration of the scheme. Our service is free.

To speak with our team, call 01273 222805 or email hello@hoorayinsurance.co.uk. There is no charge for our service and no obligation to proceed.