Portability of Health Insurance refers to the right given to the health insurance policy holder to switch from one insurer to another. In porting the policy, you will not lose the credit gained for pre-existing conditions and other time bound exclusions such as initial waiting period, waiting period for specific illnesses, etc. The No Claim Bonus (NCB) benefit accrued in the policy also gets ported. The portability also applies, when you switch from one plan to another with the same insurer.
For instance,you decide to port your health policy after three years of continuous coverage and the policy has a waiting period of 3 years on pre-existing illnesses.As you have already continued 3 years of coverage in the policy, after porting the policy you will be able to avail cover for your pre-existing illness immediately, with no waiting period.
When should you port the policy?
When you are not satisfied with your existing insurer regarding the coverage & benefits offered, you could start looking at other options available. But before porting a policy, you must check the key aspects like coverage available, presence of network hospitals, sub-limits, ease of claim settlement, etc.
Benefits of porting a policy
Portability of a health insurance policy provides the flexibility to retain the benefits of your health plan and give up the benefits you don’t need.You can also choose the features/benefits that help you to get an adequate cover. A policyholder has the option to fully customize the health insurance plan as per his/her unique healthcare needs.
Procedure of health insurance portability
There is a five-step simple process to port your policy-
- You need to apply to the new insurer to port the entire policy at least 45 days before (not earlier than 60 days) the due date of renewal of the existing policy.
- On receipt of porting application, the new insurer will provide you the portability form along with a proposal form, which you need to fill correctly and submit the same to the insurance company.
- The new insurer shall check the policyholder’s necessary details such as his/her medical and claim history from the existing insurer. The existing insurance company shall provide such data in the prescribed format within 7 working days of receipt of the request.
- Upon receiving the required information, the new insurer will frame the proposal as per their underwriting norms.
- The new insurer will communicate its decision to the concerned policyholder within 15 days.If the insurer doesn’t inform the decision during the specified time frame, the insurance company will have no right to reject the proposal and bound to accept the porting of the policy.
Problems while porting health insurance
Porting a policy comes with the customized approach to modify the benefits and coverage to suit your needs.There are some limitations as well, when you are seeking to port your health policy.
- Portability of a policy is allowed only at the time of renewal. You can’t port at any other time during the policy year.
- The premium applicable may differ, depending on the plan you want to port to. The premium may increase, if you have opted for an additional cover.
- You are allowed to port only similar type health insurance policies. Basic reimbursement to basic reimbursement policy or top-up to top-up policy can only be ported.
- Insurers have the right to accept or reject the porting request. If the insurer finds your application ‘unsuitable’, it can negate your request.
- All portability proposals are considered afresh and has to go through the under writing procedure. In underwriting, risk exposure of the policyholder is assessed and then the premium is determined which is charged by the insurer for providing the cover.
Aspects to consider while porting
Lifetime Renewability: When seeking to port a health policy, you should choose an insurer that offers lifetime renew ability for your health plan. With lifetime renew ability feature, you don’t need to worry about paying the medical bills, as the insurer is always there to cover hospitalization expenses.
Sufficient Coverage:Before applying to port a policy, you need to properly assess your entire family’s health needs and then switch to an insurer that offers you an adequate health cover. Depending on your medical conditions and claim history, the insurer will provide you the cover.
You should choose an insurance company that does not impose any restrictions on room rent, sub-limits and co-payments.
Cashless Hospitalization:When you are hospitalized in a network hospital, you can avail cashless hospitalization.You should switch to an insurer, which has a wide list of network hospitals, especially close to your residing region. At the time of medical emergency, you can rush to a nearby hospital to access quality treatment.
Loading on Premium:Depending on your health condition and claims history, the insurance company may increase your health insurance premium. You are required to port your policy to an insurer which doesn’t impose loading on the premium.
By: Mr.Subhash Nagpal,CEO and Founder at Compare Policy