Portability Between Health Insurers: All You Need to Know

Porting a Health Insurance Policy

As per the circular issued by the Insurance Regulatory and Development Authority of India (IRDAI) in 2011, the portability feature allows a policyholder to transfer their existing health insurance policy to a new insurer. This includes transferring individual health insurance policies and family floater policies issued by a non-life insurance provider.

With the portability feature, you can even switch from group health insurance to an individual plan, if need be. Besides, the insured would not have to compromise on the discounts or bonuses provided by the previous policy and can continue to enjoy the same benefits. What's more, the new policy can also be customized to add more benefits.

When You Should Consider Porting Your Health Insurance Plan?

Though the idea of porting your health insurance plan may seem scary, but it might be important under the following circumstances:

• Hidden Clauses in Your Current Plan- If you come across any hidden clause in your health policy during the policy period, while making a claim or during an emergency, or if some clauses were not made clear to you when signing the policy, you can could consider switching your insurance policy.
• Claim Settlement- If your current health insurance provider has a history of slow claim settlements or a bad Claim Settlement Ratio (CSR), you can opt for a more reliable insurance provider in such a case.
• Bad Service- If your insurer does not live up to what was formerly promised to you, or the expected quality of services, you can consider porting your policy.
• Need for Specialized Services- If you have taken up a mediclaim policy from a general insurance provider, they might not provide you with some specific services you may be looking for. In such a case, you could opt for a more specialized insurance provider instead.
• Better Products and Offerings- Health insurance companies in India are constantly coming up with new products and services. You can consider changing your existing policy for a better one if you want enhanced coverage and benefits.
• Price Differences- Given the stiff competition in the insurance industry nowadays, you could end up getting more benefits for a lesser premium with another insurance provider. It is a good idea to make the switch if your current insurer is charging high premium for less number of benefits.
• Additional Cover Needed- At times, a situation might arise where you may be looking for a specific cover for a certain illness like the critical illness cover and your current policy does not provide any such coverage. It might be better to change your insurance plan if you face such a scenario.

Now that you know when you should port your health insurance plan, it makes sense to get acquainted with the portability guidelines.

Health Insurance Portability Guidelines

Before porting your health insurance policy, you should be aware of the portability guidelines set by the IRDAI. Take a look at the various health insurance portability guidelines below:

• Portability Time Frame -Health insurance portability is only permitted at the time of policy renewal only.
• Types of Policies- Both individual and family health insurance plans can be ported.
• Types of Insurance Companies- You can port your policy from one general/specialized insurance company to another general/specialized insurance company.
• 45-day Notice Period- The application for portability should be made to the new insurer at least 45 days prior to your existing policy expiry date. You should also specify the name of the insurance provider to which you wish to port the policy.
• Acceptance Period of New Insurer- The new insurer is required to acknowledge your health insurance portability request within 3 days of receiving the proposal. However, they need to decide on your portability request within 30 days of the receipt of all required documents. If there is a delay on the part of the insurer and your policy renewal date is nearing, then the new insurer must request your old insurer to provide you with short-term insurance (up to 30 days from the due date). The premium, which you would have to pay for this short-term insurance, would be calculated on a pro-rata basis.
• Underwriting Norms- The new insurer is required to work within their underwriting norms when they consider applications for porting health policies. If your current policy is claim-free and you do not have any pre-existing illnesses, the company might charge the nominal premium only. However, if that is not the case, the premium amount might increase or the insurer might refuse to port your policy altogether.
• Declining Portability Application- Portability is not guaranteed and the new insurer has the right to decline your proposal for portability if the risk is not acceptable to them as per their underwriting norms. If this happens, you can go back to your old insurer even if your application for porting your policy is under process.
• Waiting Period- When you port your mediclaim policy, you are not required to serve the full waiting period again. Instead, the waiting period already served under your previous policy will be deducted from the waiting period of the new policy. For example, if you have a pre-existing disease waiting period of 2 years in your existing policy and you have already completed 1 year, and you wish to port your policy then you will only have to complete a waiting period of 1 year under your new policy to avail coverage for pre-existing diseases. Additionally, if you have already completed your 2-year waiting period with your current insurer, you would receive coverage for pre-existing diseases from your new insurer from day 1.
• Continuity of the Policy- The policy portability request will be denied by the new insurer if there was a break in your previous. Thus, you must always renew your existing policy on time so that you can port it anytime you want. Also, make sure you have the necessary documents that highlight the policy continuity.
• Like-to-like Policies- Policyholders should remember that only similar or like-to-like policies are portable. This means that you can migrate from one top-up plan to another or a critical illness plan to another critical illness plan. But you cannot port a top-up plan into a critical illness plan.

Steps to be Followed When Porting Your Health Insurance Plan

Given below are the steps that you need to follow to port your health insurance policy:

• Step 1- Apply for portability to the new insurer at least 45 days before your current policy expiry date.
• Step 2- Fill up the portability and proposal forms and keep all the documents of your existing policy ready.
• Step 3- The new insurer will check your details and if everything is in place, the plan will be ported within 7 days.
• Step 4- The previous insurance company will provide all the required details to the IRDAI while porting your policy.
• Step 5- After receiving the required information, the new insurer will frame the proposal as per their underwriting norms.
• Step 6- The new insurance provider will process your port application and provide you with their proposal within 15 days. If it is not done within this period, despite having received the required information, they will have to mandatorily accept your request for porting your policy.

Advantages of Health Insurance Portability

Listed below are the advantages of porting a health insurance plan:

• New Sum Insured- When it comes to portability, the sum insured and the accrued bonus will be added to determine the sum insured of the new policy. Furthermore, the existing no claim bonus will also be added to the new sum insured.
• Continued Previous Benefits- In case of portability, all the benefits provided by the old policy will remain in force in the new policy .
• Lower Policy Premiums- Due to the numerous policies offered by many health insurance companies, your new insurance provider would probably offer you the existing policy benefits for even lower premiums if you port your policy. This will bring down the cost of insurance and help you save more money.
• Transparency- As you have the option of moving to a new service provider, you can port your policy to an insurer that follows transparent practices with no hidden conditions and clauses.
• Customized Policy- You have the privilege of modifying your existing policy to suit your current health requirements with the portability feature. For example, opting for an additional cover as per your current lifestyle or changing the nominee in your policy.
• No Time-Bound Exclusions- You do not have to worry about time-bound exclusions when porting your policy.
• Better Claim Settlements- If you find the claim settlement process of your existing insurer very slow and cumbersome, you can port your policy to enjoy better services from your new insurer depending on the insurer's claim settlement ratio.
• Better Overall Services- By porting your existing policy, you have the advantage of picking a better insurer, known for its high-quality services.

Disadvantages of Health Insurance Portability

The certain limitations when it comes to porting health insurance policy are as follows:

• Timing- Portability is only allowed around the time of policy renewal and not at any other time.
• Higher Premiums- If the additional benefits provided by the new insurance company come with higher premiums, then it nullify any expected monetary benefit of porting your policy.
• Significant Policy Changes Are Not Possible -Porting can only take place within policies of a similar type and is limited to products that cover a similar risk. You cannot port to policies that are completely different. For example, a critical illness policy cannot be ported to a hospital cash policy.
• Loss of Benefits in Some Cases- If you move from a group insurance policy to an individual policy, you may not get all the benefits available under your previous policy.

Additional Factors to Keep in Mind While Porting a Health Policy

Here are some additional aspects that you must keep in mind if you plan to port your health insurance policy:

• If you wish, you can go back to your old insurer midway while porting.
• If you go back to your previous insurer, then your insurer will take you back without any additional conditions or an increase in premium.
• There are no porting charges. You are only required to pay the premiums of the new policy chosen.
• There is a 30-day grace period for your health insurance policy while the porting is underway.
• The new insurer is required to provide a minimum insurance coverage equivalent to the sum insured of the old policy. However, you can opt to increase the minimum sum insured at the time of renewal.
• You can choose to shift from one plan to another within the same insurance company.
• You can opt to port your group health insurance cover provided by your employer to an individual cover. But initially, you can convert this group insurance plan to an individual plan only with the same insurer. After a year under the individual cover, you can switch to a different insurer.

If your family members are covered under a group insurance policy provided by your employer, they can migrate to either a family floater health insurance policy or an individual health insurance policy with the same insurer.