Medical History Disregarded (MHD) in most cases allows previous medical conditions to be considered for claim. Regardless or not at what point in time that these conditions existed. This is in contrast to most other styles of underwriting in respect of Private Medical Insurance policies which normally stop the member from claiming for any conditions which occurred before the start date of the policy (often referred to as ‘pre-existing conditions’). On other underwriting styles there are occasionally waivers or waiting periods which in some situations allow pre-existing conditions to become eligible, such as Moratorium underwriting.
MHD is usually taken out on larger UK corporate schemes with many members where the administration becomes difficult with a larger membership and in turn the premium is usually higher which allows the Insurer to carry an additional element of risk in covering the potential for claims in respect of treatment for pre-existing conditions. Normally the required membership is 20 but in many situations we have negotiated MHD terms for smaller memberships, this is not always possible however and MHD does need careful consideration for smaller groups as to whether it is an appropriate or sustainable form of underwriting.
The main risk in MHD underwriting for smaller groups is that due a low premium level the insurer is much more likely to incur high value unforeseen claims and in turn raise the renewal premium in the following year to make up for their loss. On larger schemes due to the higher premiums and membership the claims tend to be less volatile allowing insurers to price in more sustainable increases at renewal.
If you are looking to provide a low administration and high value benefit to staff, Medical History Disregarded underwriting is a very effective way to achieve this, it allows members to claim for treatment that would otherwise be via the NHS and have potentially lengthy wait times.
Please note that this does not constitute a recommendation or advice.