A PMI policy with 5/2/1 underwriting indicates what?

In the context of PMI (Private Medical Insurance) underwriting, a policy referred to as having a 5/2/1 designation means that the insurer will look at medical history over a specific period before and after the application for coverage. Specifically, "back 5 years" indicates that the insurer will review an individual's medical history for any relevant health issues or claims made in the five years leading up to the application. This historical data is integral in assessing the risk profile of the applicant.

The "forward 2 years" component suggests that the underwriting will consider potential health issues anticipated within two years after the policy is issued, affecting future claims. This forward-looking aspect allows the insurer to evaluate the likelihood of future health care needs based on existing conditions at the time of underwriting.

Finally, "needs to be inactive for a continuous 1 year period" is a requirement indicating that any previous policies or claims must not have been active for a full year prior to applying for this PMI coverage. This stipulation is designed to ensure that applicants are not seeking immediate coverage for ongoing medical issues that may have been previously insured elsewhere.

This combination of criteria helps the insurer adequately assess the risk and make informed decisions regarding underwriting and premium calculations.