Pros and Cons of Health Insurance Portability

Health insurance companies offer a 15-day free look period, which may not give you enough insight into the policy or the insurer’s potential shortcomings. There are many reasons why individuals may be dissatisfied with their current health insurance contract and choose to change insurance companies. Recognizing these needs of policyholders, Insurance Regulatory and Development Authority of India (IRDAI) In 2011, we introduced medical insurance portability.

But is porting your health insurance policy really a good idea? This article will explain the pros and cons of health insurance portability and help you make the right decision.

What is health insurance portability?

As mentioned earlier, the Insurance Regulatory and Development Authority of India (IRDAI) allows the option of health insurance portability for individuals who are dissatisfied with their current insurance features. Health insurance portability allows policyholders to transfer their insurance from one existing insurance company to another without losing the benefits of their current policy. This feature also allows you to switch from an individual health insurance plan to a family floater health insurance plan, subject to underwriter approval.

Health insurance portability has been widely accepted in the auto industry and is now widely offered by all health insurance providers in India. The process of moving from one insurance company to another without losing continuation benefits such as coverage for pre-existing conditions and maintenance of waiting periods is called porting a health insurance plan.

This portability applies to all indemnity-based individual health insurance policies, family floater health insurance policies, and group health insurance policies. IRDAI or any insurance company will not charge any fee for providing portability facility in health insurance.

Health insurance transplants include the following transfers:

• Current insurance amount

• Current insured person

• Cumulative no claim bonus

• Covers waiting period for pre-existing conditions

• Waiting period for specific diseases covered

• Waiting period for maternity allowance

What are the benefits of porting a health insurance policy?

1. Improving service quality:

Moving to an insurance company with a reputation for great service will improve your overall experience, from obtaining a policy to settling a claim.

2. Transparency of policy terms:

If your current policy contains hidden terms and conditions that negatively impact your coverage, it may be beneficial to switch insurers.

3. Efficient claim resolution:

Porting allows you to move to an insurance company with a faster and more efficient claims settlement process, addressing issues related to slow or inadequate processes.

4. Potential cost savings:

By switching to a competitor with lower premiums, you can get the same benefits at a more affordable cost.

5. Customized coverage:

During the transition process, you have the option to increase your insurance amount and expand your insurance coverage, subject to your new insurance company’s approval. A transplant can give you additional coverage and benefits that your current insurance company doesn’t offer.

6. Waiting period:

If you already have current health insurance coverage, you do not need to undergo the waiting period provision again. Any remaining waiting period will be deducted from the waiting period of your new policy. However, if your new insurance company offers additional coverage with a mandatory waiting period, you must notify us before issuing your health insurance policy.

7. Grace period:

You will be given an additional grace period during the health insurance process. Premiums are calculated based on the number of days your old policy was in force.

8.NCB:

The new insurance company will give you a premium discount based on the accumulated No Claims Bonus (NCB) of your old policy. This is a major advantage of transplantation and ensures that the benefits of NCB are maintained.

9. Free service:

Health insurance portability services are provided free of charge and insurance companies are prohibited from charging fees for providing this feature.

10. Improved overall value:

After thorough research and comparisons, choosing a new policy with a better overall value for services will be a wise decision.

What are the disadvantages of porting a health insurance policy?

1. Porting to the same type of policy:

Portability is only allowed between policies of the same type. This means that complete changes to your plan, coverage, or insurance type are not allowed. For example, you can port from one basic health insurance plan to another basic health insurance plan, or from one top-up health insurance plan to another.

2. Porting to the same type of company:

The destination company must also be of the same type. For example, you can move from one general insurance company to another general insurance company, or from one specialist health insurance company to another specialist health insurance company.

3. When updating:

Portability is only allowed during policy updates and not otherwise.

4. Premium increase:

In some cases, choosing additional features or coverage may increase your premiums during the porting process. Additionally, your new insurance company may offer higher premiums than your current insurance company, depending on factors such as pre-existing conditions and claims history.

5. Policyholder’s responsibility to notify insurance company:

To begin the health insurance portability process, you must notify your current insurance company in writing at least 45 days in advance. Additionally, you must specify the name of the insurance company you want to switch to. The policyholder’s responsibility to notify their current insurance company at least 45 days in advance increases the procedural burden.

6. Response from your current insurance company:

Once the new insurance company receives your portability request, it must approve it within three business days and make a decision within 15 days after receiving all required documentation. If a delay occurs, your new insurance company will need to request short-term coverage from your current insurance company. This coverage is provided for up to 30 days and premiums are pro-rated.

7. Waiting period considerations:

Certain policies may still have a waiting period, even though the old policy still has a waiting period.

8. Careful consideration:

During the porting process, you should carefully consider the terms and conditions of your new policy to ensure they meet your needs.

9. Time to get used to it:

The transition may require adjustments as you get used to your new company’s procedures.

How do I transfer my health insurance policy?

To begin the health insurance transfer process, follow these steps:

1. Choose the right health insurance.

Choose the health insurance that best suits your requirements.

2. Submit a porting request.

Visit your new insurance company’s website and submit your port request. Alternatively, you can make your request offline by visiting your local branch or calling your insurance company’s helpline.

3. Confirmation and guidance:

Once your request is received, an insurance company representative will contact you to review your request and provide guidance regarding the transplant process.

4. Receive and complete the form.

Your insurance company will send you an IRDAI portability form and a proposal form. Please fill out these forms carefully and return them to your insurance company along with the required documentation.

5. Medical history and policy details:

Once the documents are received, the insurance company will contact your current insurance company to obtain your medical history and policy details. Insurers are obliged to share this information through IRDAI in response to such requests.

6. Underwriting process:

After the new insurance company receives all the necessary details, it will begin the underwriting process. At this stage, the insurance company will analyze your profile and decide whether to approve your insurance offer.

7. Timely underwriting:

Underwriting must be completed within 15 days of receiving details from your current insurance company. All delays will be considered covered under your new health insurance policy.

8. Required documents:

A general list of documents that must be submitted during the health insurance transition process includes:

• IRDAI Portability Form

• Proposal

• Identity verification documents

• proof of address

• Existing insurance policy (obtained from your current insurance company)

• Medical history documentation (obtained from your current insurance company)

• Insurance claim history (obtained from current insurance company)

• If applicable, a no-claims declaration (obtained from your current insurance company)

As conclusion:

Purchasing health insurance requires careful consideration by analyzing your lifestyle, family requirements, medical history, and various other factors. Similarly, when transferring health insurance policies, consider the aforementioned points and thoroughly review limitations, sublimits, coverages, clauses, inclusions, exclusions, premiums, and waivers to avoid future disappointments. That is important. If you choose to transfer your health insurance online, it will be easier to compare policies and you may also receive discounts on your premiums.

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Ketki Jadhav I have been a content writer at PersonalFN since August 2021. She has her MBA (Finance) and she has over 7 years of experience in retail banking. Ketki specializes in articles about banking, insurance, personal finance, and mutual funds, which she has been doing for over three years.

Disclaimer: Investing in securities markets is subject to market risks, so please read all relevant documents carefully before investing.
This article is for informational purposes only and is not intended to influence investment decisions. It should not be treated as a mutual fund recommendation or advice for making investment decisions in the above schemes.