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Do you think that you are paying a high premium on your health insurance policy that has a lot of limits, and are impressed with the policy features of another insurer? You can now choose to shift your health insurance policy to another insurer without losing the benefits you have accrued in your existing policy. From October last year, the insurance regulator has allowed health insurance policyholders to change their insurer. Here is a brief snapshot on what is portability and what factors should govern your decision to port:

According to the Insurance Regulatory and Development Authority (Irda) guidelines, portability means the right accorded to an individual health insurance policyholder (including family cover) to transfer the credit gained by the insured for pre-existing disease conditions and time-bound exclusions, if the policyholder switches from one insurer to another or from one plan to another plan of the same insurer, provided the previous policy has been maintained without any break. A break in a policy occurs when the premium due on a given policy is not paid on or before the premium renewal date or within 30 days thereof.

Conditions for porting:

You can opt for portability only at the time of renewal by making a request for porting at least 45 days prior to the policy renewal date. There is no option to seek portability when the policy is continuing.

Your sum insured with the new insurer will be the same as in your old policy. Incase you have acquired a cumulative bonus from the previous insurer, this will be added to your new policy. For instance, if your cover was for Rs 2,00,000 and you have an accrued bonus (because you did not claim) of Rs 50,000; while porting your policy you will get a cover of Rs 2,50,000 by charging the premium applicable. Incase the new insurer does not offer that cover, he will offer you the nearest higher slab, say Rs 3,00,000, by charging premium applicable for Rs 3,00,000.

Portability is applicable for all individual health insurance policies, family floater and group health insurance policy. However, policyholders covered under a family floater or a group health insurance policy will be allowed to port to an individual health insurance policy or to a family floater policy with the same insurer till completion of one year with the existing insurer.

Procedure to port your health insurance policy:

To transfer your policy from your existing insurer to the new insurer, you will have to fill in an application form and a proposal form for porting. Few insurers are allowing people below 45 years of age to apply and submit porting proposal forms online without any medical tests. The new insurer will then process the application and seek necessary details such as your medical history and claim history within a week on a porting website created especially by Irda.

The existing insurer will have to furnish all the required data about the insured within a week through the portal. If the new insurer wants, he will accept your proposal. The new policy will carry forward all the benefits accrued in your existing policy. However, if the new insurer despite getting all the relevant details from your existing insurer does not communicate its decision to the you within 15 days, he will lose his right to reject your proposal and shall have to accept your proposal.

Incase, the portability request has not been disposed of by the new insurer, your existing policy can be extended for a short period (has to be at least one month) by accepting a pro-rate premium. Incase there is a claim, your existing insurer will pay the claim and ask for the balance premium for the remaining part of the policy year. Your existing insurer cannot cancel your policy until a confirmed policy from new insurer is received. If, for any reason, you intend to continue the policy further with your existing insurer, you will be allowed to continue by paying the regular premium without any new conditions.

Benefits of the health insurance portability:

The key benefits of portability are waiting period credit for pre-existing conditions and time-bound exclusions. These two benefits are given to a policyholder without any additional premium. These are explained as follows:

Pre-existing condition/disease:

Before portability came into effect, if a policyholder was suffering from any pre-existing diseases, the insurer would not provide cover for those diseases till four years. Incase the policyholder shifted to another insurer, he would again be required to do a premium paying term of four years to get his pre-existing diseases covered. Now, with portability, he can carry forward the waiting period gained for pre-existing disease/condition to the new insurer from the day one itself. Also, policyholders with good claims experience earn a no-claims bonus that is around 5 per cent of the sum insured every year. This too can be carried forward to the new insurer.

Time exclusions:

Most insurers do not pay claims for certain illnesses such as hernia, cataract, piles, fissures, fistulas, hysterectomy, surgery of gall bladder, joint replacement generally for the first year of the policy. Such exclusions are called time exclusions. Now, in case you were covered under an existing insurance policy for a period of one year, the waiting period of 30 days and first year exclusions will not apply in the policy to be renewed. Incase the disease has two-year exclusion, then you will have to wait only for one more year.

However, if the new insurer is providing an additional coverage not present in your existing policy, the waiting period for those additional benefits will apply.

When should you port?

Since most health insurance products are similar, if another insurer is offering a lower premium, you should consider porting.

Says Girish Rao, chairman, Vidal Health, “Premium rate is going to be the single largest factor driving portability. As competition increases with the new entrants, we will see new products with lower premium and attractive features. Portability will be used to garner market share by non-life insurers.” If the new insurer’s product has better features such as higher renewability, flexibility to increase your sum insured and no limits on room rent, you should consider porting. If the service levels of your existing insurer are wanting and the prospective insurer are better, you should consider porting.

Look at the quality of hospital network in your location where you can get cashless hospitalisation. Says Rao, “The policyholder may be staying in a remote location and the hospital network in his area may have problems with cashless hospitalisation. The policyholder should consider the existing insurer’s depth of access for cashless hospitalization; which, if found low, he should consider porting.” Incase the market reputation of your existing insurer is lower and its solvency ratios are falling, you should consider porting.

When you should not port?

Do not consider porting if your claim has been rejected and you think that the other insurer is more lenient in claim settlement. However, there are high chances that your agent may wrongly advice you to port saying that the second insurer is more open to claim process. Do not port because of poor service levels of the third-party administrator (TPA). Do not consider porting if you are not sure of the benefits in the policy from the new insurer.