Article

Health Insurance Portability
June 25 , 2012

Are you living with a medical insurance policy you are unhappy to keep? Fret not; you can switch between insurance providers or between plans of the same insurer. All health insurance policies are portable, just like mobile service providers. IRDA passed guidelines to this effect from July 2011 for health insurance policies bought from life insurers and non-life insurers.

Why would you port your health insurance plan?

Many people do not buy health insurance policies for themselves. They receive them along with their salary packages. Such people would be greatly inconvenienced as they switched jobs since they would have to discontinue the existing medical insurance policy.  Others who had to move from one part of the country to another were at a disadvantage as they found that their insurer had poor servicing in the new locality.

Apart from the pain of identifying a competent insurer and going through the underwriting procedure all over again, the greatest setback was the fear of losing pre-existing diseases (PED) cover. Finally insurance regulator IRDA stepped in with regulations on health insurance portability implementing it on 1 July 2011.

Facts about health insurance portability

 1. All health insurance policies are portable. Acceptance of proposal by new insurer will be subject to underwriting norms of the company. Individuals covered under a group health of a non-life policy can migrate to an individual policy or family floater with the same insurer. After this they can switch to an insurer of their choice.

2. Policyholder must apply to the new insurance provider at least 45 days prior to the premium renewal date of existing policy provided the policy has been continued without breaks. Policies can be ported only during renewal.

3. During waiting period for acceptance of proposal by the new insurer, the policy holder can request for extending policy with current insurance for a short term period of at least a month. Pro-rata premium must be paid for the short term cover. Existing insurer cannot cancel policy unless proposal for insurance is accepted by the new insurer or the policyholder requests to.

4. Waiting period served in the existing policy will be credited in the new policy. For instance if the waiting period for covering pre existing illnesses is two years in the existing and three years in the new policy, you will be excluded for that disease/condition for only one year under the new policy.

5. Sum assured under new policy will be equal to a minimum of sum assured under existing policy plus bonuses gained, if any.

6. New insurer shall not charge loading on premiums for porting policy.

Caution before porting

Ready to port already? Hold on until you have ascertained that the new insurance policy is truly better than the one you have. Check if the policy lays down sub-limits on cover. Often sub-limits limit the scope of coverage. The most important factor to look for in an insurance policy is quality of service. Do your bit of research to find claims processing of the insurer in terms of claim settlement ratio, average settlement time.  

Get set go

The procedure is as simple as can be. Fill in the portability form along with proposal form and submit to the new insurer before 45 days of premium renewing date of existing policy. The new insurer will collect data pertaining to your medical history and claim history from the existing provider and your proposal will be accepted subject to underwriting norms of the new provider. 

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