Health Insurance Portability – Explained

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The Insurance Regulatory and Development Authority (IRDA) introduced health insurance portability in 2011, which allows a policy holder to switch to another insurer to get better services without losing the credit gained from pre-existing conditions and time-bound exclusions.

A health insurance policy has become a essential part of financial planning amid the rising of disease and increasing medical inflation. More than 20 companies in India offer a variety of health insurance plans that safeguard the individual from unforeseen events such as medical emergencies. However, it is advisable to not just blindly renew the policy, but to evaluate the benefits and features available. If a customer is not satisfied with the benefits, premium or quality of service from the insurer, they can consider porting the health insurance policy.

At the time of proposal, the new insurer will give the policy holder the credit relating to the waiting period for pre-existing conditions that the individual has gained from the old insurer. The features of the existing policy cannot be ported to the new insurer — only the sum insured (including no-claim bonus) can be ported.

An individual can port if the insurance provider does not deliver the promised quality of service. If the existing insurance provider does not offer sufficient cover against specific health issues, then the policyholder may consider porting to another service provider. Another factor that can lead to porting is slow claim settlement by the insurance provider. A policyholder can also opt for health insurance portability if another service provider is offering better services for the premium that he is paying for the existing policy.

The conditions for opting Portability:

• Portability option shall be exercised at the time of renewal.
• The policy must be continuous without a break in period.
• Must apply to the new insurance company for portability at least 45 days prior to the date of renewal. A policyholder can modify the policy while porting to suit their current health requirements.

Advantages of porting the policy:

• Existing sum insured and no claim bonus gets added to the accrued bonus during portability to give the new sum insured.
• Benefits of the old policy continue in the new one.
• Policyholder may get existing benefits at lower premium prices.
• Policyholders can benefit from better service and attention.
• Portability allows the policyholder to choose a provider with better claim settlements.
• A policyholder can also port to a new service provider to avoid hidden clauses and conditions.

Disadvantages of porting the policy:

• Policyholders can only go for porting when their policy is due for renewal and not at all times.
• They can port to only similar types of policy.
• At times, policyholders have to pay a higher premium to enjoy additional benefits that erases any monetary benefit from porting.

Reasons behind Health Insurance Portability

Look at some of the common reasons why a policyholder may opt for health insurance portability:
• Poor service quality
• Inadequate cover for specific health issues
• Late reimbursements
• Hiked premium, in case a claim is made
• Hidden clauses and conditions leading to lack of transparency
• Unacceptable co-payment clauses
• Room rent limits
• Better deals from another health insurance provider

Desire to move to a specialized health insurance company offering personalized services in sync with a person’s needs.

The Portability Process:

The policyholder has to inform the existing insurer about his intentions of porting at least 45 days before the expiry of the current policy. They will also have to specify the insurance company to which he wants to shift the policy.

• The policyholder will have to fill the portability form and provide the existing insurance details such as name and age of the insured.

• They will also have to fill up the proposal form with complete details for the new insurer and submit the essential documents along with it.

Before making the final switch, it is recommended to go through the features, coverage and benefits offered by the new policy. Also, understand the differences between the two policies in terms of sum insured slabs, premium, entry age restrictions, renewal limit, sub-limits, capping, waiting period, co-payment, hospital network, etc.

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