Portability of Health Insurance

Health Insurance Portability

Today, most aspects of our lives revolve around our well-being and overall health, leading to a significant expansion of the health insurance industry. Health insurance is coverage provided by an insurance company to help meet future uncertain medical expenses.

Fortunately, the Insurance Regulatory and Development Authority of India (IRDAI) introduced "Health Insurance Portability," a convenient facility that offers relief to policyholders dissatisfied with their current health insurance providers.

Health insurance portability allows you to transfer your current health insurance policy from your present insurer to a different one, without losing existing benefits. This feature also allows you to port from an individual health plan to a family floater plan.

Common Reasons for Health Insurance Portability

• Poor service quality
• Late reimbursements
• Slow and inconvenient claim settlement
• Hike in premium
• Lack of transparency
• Inadequate cover for specific health issues
• More competitive offerings from another health insurance provider

Key Considerations When Opting for Health Insurance Portability

We all know how vital health insurance is. Therefore, if you opt for health insurance portability, it is advisable to keep the following points in mind:

• Thoroughly check all limits, sub-limits, and restrictions based on age, disease, or hospital when opting for portability.
• Remember that when you switch insurers, you can port only the waiting period, bonus credits, or pre-existing disease coverage, not the specific features of your policy.
• The application for portability should be filed at least 45 days prior to the renewal date of the existing policy. Delays in processing your portability request might force you to renew your existing policy. Therefore, it is advisable to apply early.
• Many port their health insurance policies seeking lower premiums. However, this might lead to reduced coverage, potentially costing more in the long run. Therefore, when porting, give equal importance to both premium and coverage.
• Check the network hospitals of the new insurance provider. It is advisable to have a network hospital in mind, which can be crucial during emergencies.

Pros and Cons of Health Insurance Portability

Having understood the common reasons for switching health insurance providers, let's now discuss the pros and cons of health insurance portability.

Pros:

• Portability offers a customization option, allowing you to modify the policy as per your requirements and lifestyle.
• The existing No Claim Bonus (NCB) will be clubbed to calculate a new sum insured.
• All accumulated benefits of your existing plan, such as waiting periods served, will remain in force.
• Due to high competition, insurers often offer competitive premiums for similar benefits.

Cons:

• Portability is only allowed at the time of policy renewal.
• You can only port to similar types of products.
• Opting for additional benefits may result in higher premiums.
• When moving from a group plan to an individual plan, you might lose some advantages enjoyed with the existing group policy.

Health Insurance Portability Rules

1. Policy Types Permitted for Portability

   An insured can port only similar policies. For example, a reimbursement policy can be ported to another reimbursement policy, or a top-up plan to another top-up plan. Similarly, an individual health plan can be ported to a family floater plan, and vice-versa.

2. Permitted Insurer Types

   A policyholder can port their insurance plan from any general or specialized insurance company to another.

3. Renewal Requirement

   Health Insurance Portability is allowed only at the time of renewal. It is crucial to renew your health plan on time without any breaks to avail this facility.

4. Intimation Period

   Policyholders wishing to port their health insurance must inform their existing insurance company in writing at least 45 days before the current policy's renewal date.

5. Acknowledgement of Request

   The existing company will acknowledge your portability request within three days of receiving the application.

6. No Porting Charges

   There are no charges for health insurance portability.

7. Premiums and No Claim Bonus

   Insurers are free to levy premiums as per their underwriting norms, so premiums may vary. Policyholders in a high-risk category may have to pay a higher premium upon porting.

8. Grace Period During Porting

   If the portability application is under process, applicants are eligible for a 30-day grace period. During this period, the insured must pay the premium on a pro-rata basis to avail coverage. As per IRDAI guidelines, the insured cannot be forced to pay the premium for the entire year.

   Know More About: Grace Period in Health Insurance

9. Sum Insured Increase

   Policyholders can request an increase in the sum insured at the time of portability. However, its approval is at the discretion of the new insurance company.

10. Waiting Period for Pre-existing Diseases

    If the insured opts for an increased cover, the waiting period associated with pre-existing diseases for the enhanced sum insured will apply as per the new policy.