Moratorium Underwriting

Hi, I am trying to understand how the moratorium underwriting works

I've been reading the core reading in chapter 27 section 1.1, and also cross referring to the past paper (ASET) of September 2014 Q4ii.
I am quite loss when cross referring them because they seem lead me to different understanding of it

If I were to think logically (guessing what the core reading & past paper solution meant):
There are two periods, call these period A & B, so:

Period A (say 5 years)
If inception date is 1/1/2021, period A will be from 1/1/2021 to 31/12/2025
All conditions are claimable, except treatments/conditions happening within the last X years before inception.
Question: what is X years, is this defined separately in the contract?

Period B (3 years)
From 1/1/2026 to 31/12/2028,
If there is symptom/treatment for the preexisting condition during period A, then this period may start after 1/1/2026.
ie: if there are symptoms during period A on 31/12/2023, then period A has to be restarted, period B will then start 3 years later on 1/1/2029
Question: What if the policyholder lies about the symptom? They could feel very unwell, but do not consult a doctor so period A doesn't reset

If no symptoms, this period B will start at the earliest possible date on 1/1/2026
In this case, all conditions are claimable, including those that happened during period A.
However if claimed on 31/12/2027, period A restarts. The earliest next claim will be on 1/1/2033. So there is a 5 years "cooldown" period




I am very confused reading the last bullet point at the CMP, at the end of page 3 of chapter 27.
In that page, the first bullet point talks about exclusion in the last 5 years (Period A), but the second point mentioned "after a second defined period".
Where did this second period comes from? Is this "Second" period actually referring to B, therefore in total there are 3 periods rather than 2?
And in that case, the last bullet point of this page is actually talking about the third period (quoting the second period).

Can someone explain this underwriting mechanic to me? I am very confused cross referring these 2 sources.

Thanks

 

Thanks Mark, that is very clear now.

However now I want to reconcile this information back to the September 2014 Q4 ii.
In the question, it mentions a moratorium underwriting, which exclusion is removed completely after 5 years irrespective of the policyholder health and treatments received.

I am looking at the ASET solution sheet (which organised the points nicely)
There are 3 periods here:
Period 1 which exclusions are fully applicable, this corresponds to period A in my previous post (correct me if I am wrong)
Period 2 which claims will be payable if there are no symptoms or treatments in period 1, this corresponds to period B of my previous post
Period 3, which exclusions are completely waived

Is this 3rd period a special product feature for this question specifically?
My understanding is the policy will alternate between A and B (Period 1 & 2) throughout the policy term, if there are claims made.
There is no time point where exclusions will be waived indefinitely.

This is what confused me when I cross refer between the notes and ASET. because I can't find any references to period 3 in the notes.