Health underwriting — six questions answered

What is health underwriting? What will the insurer ask?

Health underwriting is the process by which an insurer assesses your individual health status and risk after receiving your application. The insurer reviews the information you provide and decides on one of four outcomes:

• Standard acceptance — normal premium, full coverage; the ideal outcome.
• Loading (sub-standard) — accepted, but with an additional premium charged on top of standard rates because of certain health risks.
• Specified exclusion — accepted, but a particular condition is permanently excluded from cover; everything else is still covered.
• Decline — the application is not accepted.

A typical Voluntary Health Insurance Scheme (VHIS) application form will ask about the following areas:

• Height, weight, smoking status, alcohol consumption;
• Past medical history, hospitalisations and surgeries (the standardised VHIS health questionnaire only looks at the past 5 years);
• Any medication currently being taken on a regular basis;
• Mental health / psychiatric consultations (including, for example, insomnia treatment);
• Family medical history — the VHIS health questionnaire is standardised and asks whether immediate family members have had cancer, heart disease, diabetes, etc.;
• Occupation and any high-risk hobbies (e.g. scuba diving, mountaineering).

If certain answers raise flags, the insurer may also request medical check-up reports, past medical records, or a doctor’s opinion letter before issuing a final decision. This typically takes anywhere from a couple of weeks to a month.

I have a pre-existing condition or take medication. Can I still apply?

The answer: in most cases yes, though the terms may differ. A pre-existing condition does not automatically mean a decline. The outcome depends on the nature of the condition, its severity, how well it is controlled, and how long ago it occurred. There are typically three possible outcomes:

Only a small number of more serious situations (e.g. cancer currently in treatment, recent coronary bypass surgery, severe diabetes with complications) are likely to result in a decline. That is why applying early, while you are young and healthy, is the most efficient time — do not wait until something has happened.

Does an exclusion mean my whole policy is useless?

No. An exclusion only carves out a specific body part or condition; it does not invalidate the rest of the policy. All other coverage remains in force.

An example:

So an exclusion is targeted and bounded. When reading the terms, keep in mind:

• The more precise the exclusion wording (e.g. “left anterior cruciate ligament”), the narrower its scope — better for you;
• Broad wording (e.g. “all bone, joint and muscle conditions of the lower limbs”) deserves caution because it cuts cover wide.

When you receive an insurer’s offer, go through every exclusion line by line with your agent or broker — do not simply sign without checking.

How is loading calculated? How much extra is typical?

Loading is usually expressed as a percentage on top of the standard premium. Common levels range from +25% to +200%, depending on the level of risk.

A simple example:

Important: loading is not just charged in the first year — it applies every year at renewal. So a plan with +50% loading accumulates several thousand extra dollars over a five-year horizon. Before deciding, ask your agent for a “10-year total premium comparison” sheet.

A further VHIS rule worth remembering: an insurer cannot raise an individual policyholder’s premium based on that policyholder’s claims experience alone. Any premium adjustment has to apply to the entire product line (same plan, same age band) collectively — it cannot be applied to a specific policyholder for “having claimed before”. So even if you do end up using the cover later, your renewal premium is priced uniformly with the rest of the same-age, same-plan cohort.

What happens if I do not disclose my medical history at application?

In one word: serious. Failing to disclose material medical history at application (in the trade, “non-disclosure”) is one of the leading causes of declined claims and cancelled policies under VHIS.

The three most common consequences:

1. Claim denied

   When the insurer reviews your medical records during a claim and discovers prior history that was not disclosed, it can invoke the “non-disclosure” clause to deny that claim. The most direct loss is that the medical bill comes out of your own pocket.

2. Policy rescinded (treated as never effective)

   If the omission is serious enough, the insurer can treat the policy as never having been effective from the application date. Premiums paid are refunded, but all coverage disappears. This is called rescission — effectively, the policy is voided.

3. Future applications become harder

   Once a policy is cancelled for non-disclosure, the record stays on file. When you apply elsewhere, the application form usually asks “Have you ever been declined or had a policy cancelled?” — answering “yes” honestly will significantly affect the next underwriting outcome.

The principle is simple: if asked, answer honestly; if uncertain, call your agent or customer service. Even at the worst, “full disclosure” only ends in loading or an exclusion — much better than having a claim denied or the policy rescinded.

The following categories are the most commonly under-disclosed but most likely to cause issues:

• Regular medication (including blood-pressure, diabetes, sleep, antidepressant medication);
• Items flagged as “abnormal” on a body check report (even if the doctor said “monitor only”);
• Hospitalisations and surgeries within the past 5–10 years;
• Mental health / psychiatric consultations.

Does being declined or non-standard accepted affect my future applications?

The answer depends on whether you are applying across insurers or at the same insurer — the rules differ.

So if the first quote you receive is not on terms you want, it is perfectly reasonable to seek independent quotes from a second or third insurer — the prior offer does not “follow you” across insurers.