Health insurance portability

A health insurance policy has a feature which allows policyholders to switch to better policy terms and benefits. It is known as 'portability'. This benefit can be exercised by the policyholders while making a switch from one insurer to another. However, it is important to note that while changing your insurer, policyholders do not lose the benefits which they have accrued in their existing policy. 

Policyholders opt for this facility mainly when they are not satisfied with the service provided by their present insurer or when they are looking to avail extra coverage, or for any other reason. To make you understand better, here we will discuss everything about health insurance portability.

Why policyholders use portability option?

When it comes to choosing a new health insurance plan, by availing the portability feature, policyholders may find it confusing. However, it can be easily simplified if these points are kept in mind.

Poor service – If your insurer is not able to meet your expectations and not giving you the promised quality of service, then it is time to switch your current plan using the portability option.

Additional coverage – Your existing health insurance might not be offering sufficient coverage against specific health issues which are of concern to you. So, it might be the right time to move to a service provider that covers all your medical requirements.

Sluggish claim settlement – With a health insurance plan, a successful claim is the most important thing. If your insurer is very slow in the claiming process, then it might be the time to look for better companies.

Hidden clauses – Transparency is a crucial thing for every customer when he/she associates with any insurer. Sometimes, hidden clauses turn out to be a major concern at the time of medical emergencies and it becomes rational to port to an insurer who has no hidden clause. 

Better offer- If you find yourself who is paying a very high amount for the services you can opt for portability option. This can get you better value for your money and can let you grab some great deals.

What are the rights of the policyholder while porting?

  • You can port your policy from and to any general insurance company or specialized health insurance company.
  • You can port any individual/ family policies from one insurer to another.
  • Your new insurer will have to give you the credit relating to the waiting period for pre-existing conditions that you have accrued with the old insurer.
  • Your new insurer will have to insure you at least up to the sum insured under the old policy.
  • The two insurers should complete the porting as per the timelines prescribed in the Insurance Regulator Development Authority of India's protection of policyholders’ interest regulations and guidelines.

What are the conditions required for portability?

A policyholder can apply for porting an old health insurance policy only at the time of renewal, which ensures that the new period of insurance will be effective with the new insurance company.

To port an existing policy, the policyholder is required to submit a written application to its present insurer to shift the policy to the new insurer.

Application must be given at least 45 days before the policy renewal date, mentioning the name of the insurance company to which the policyholder wants to switch his/her policy.

What is the process of porting?

Once the insurance company receives the insurance portability application, it provides the policyholder with a proposal form and a portability form. The current insurance company then shares the details of the insured person with the new insurer via a common IRDAI (Insurance Regulatory Development Authority of India's) portal for sharing the customer data. Once the new company gets all the details the insurance policy goes for underwriting within 15 days. Failing to respond within 15 days will force the insurer to accept the portability application.

What are the documents required for portability?

  • Policy certificates of previous years
  • Latest notice of renewal mentioning coverage continuity and other details
  • Self-declaration from the policyholder in cases of no-claim
  • The investigation report, discharge summary and other equivalent documents in cases of claims
  • The proposal form and portability form.

Grounds of rejection of portability requests

If in the case, a policyholder fails to submit the above-mentioned documents well on time, the IRDAI (Insurance Regulatory Development Authority of India) has given the insurers the right to reject a health insurance portability application request. A portability request may also get rejected due to inadequate information, poor claim history and breaks in the renewal of the policy.

Another major factor that may lead to the rejection of health insurance portability is the higher age of the policyholder. While people in the age group of 60-70 have some chances of portability, the applications received from the people who are above the age of 70 have higher chances of rejection. Besides this, when senior citizens apply for portability, insurance companies apply severe underwriting rules, charge higher premiums, and may even introduce a co-pay clause.

Bottom Line

Therefore, it is advisable to furnish all the necessary details to the insurer and keep the required documents handy before deciding to port your insurance policy. This will prevent your application from getting rejected and hence, will make the process smooth and hassle-free.

Secondly, to be aware of the differences between your present policy and new policy, features, and benefits offered by your new insurer, etc to avail of a health cover that matches one’s needs.