Port Your Health Policy - Choose Wisely
Are you unhappy with your current health insurance company or plan? Do you find other health insurance plans to offer a comprehensive scope of coverage or is cost-effective or have lower or minimal coverage restrictions and even have a simpler claim settlement process? Then portability can be a good option for you.
The process of portability involves moving existing insurance to a new one with a different insurer without forfeiting any accrued benefits, such as the No Claim Bonus (NCB), waiting period credit, etc. The IRDA guidelines states that no insurer, whether new or existing, is allowed to charge a fee for transferring a health insurance policy.
To ensure an effortless switch and avoid any potential pitfalls, insured should take into account key details before porting their current health insurance policy.
The term “portability” describes the ease with which something may be carried, moved, or relocated from one place to another. In the context of health insurance, the ability of policyholders to switch from one health insurance provider to another without losing the benefits accumulated under their present policy is referred to as portability. It enables people to change insurance companies while keeping their policy’s waiting periods, pre-existing disease coverage, and other benefits in place. The Insurance Regulatory and Development Authority of India (IRDAI) launched health insurance portability in India in 2011. By allowing people the freedom to select a different insurer that better meets their needs, it is aimed to empower policyholders and encourage competition among health insurance providers.
After shortly outlining portability, let’s move on to the most frequently asked question, “Why portability is important?”
With portability, when a policyholder changes to a new health insurance provider, they do not forfeit any accrued renewal benefits. However, there are numerous concerns with the decision to switch health insurance providers. The answer is simple; with increased competition among service providers, insurers may be hesitant to keep their current insurance due to reasons including existing insurer’s services are insufficient, they charge excessive premiums, and their products have sub-limits. On top of that, an insured person’s needs may vary during the course of his policy schedule, and portability can be the ideal way to accommodate these new needs. While porting would enable people to change to a health insurance plan with improved coverage, such as higher sum insured at lower premiums, additional perks, or coverage for certain treatments.
In order to better meet their healthcare needs and address gaps in their current coverage, policyholders may enhance their coverage. Before making the transfer from their existing health insurance to a new one, it is crucial that you give your insurance advisor all pertinent information, such as any pre-existing/present illnesses/major accidents, recent insurance proposal/claim denials, or illnesses that have been cured. Make sure that the new plan will cover any pre-existing medical conditions which you have, without any waiting periods or restrictions if you have any. Although keep in mind that portability is only feasible at the time of policy renewal.
- To begin the procedure, you may need to fill out the IRDA portability form. It should be noted that a policyholder might seek portability when the insurance is up for renewal. You must contact the insurance company where you want to move your current health insurance coverage. The new insurer will give you two documents: a portability form and a proposal form. They may also send information on the company’s numerous health insurance policies.
- Once you have submitted the relevant documents to your new insurance provider, they will contact your old insurer and obtain your medical records and other pertinent information. They may also request your claim history. When your old insurer receives such a request, it is obligated to share this information.
- When the new insurer receives all of the necessary information, they will decide whether or not to provide you with a health insurance policy. This is known as policy underwriting. An underwriter will examine your data and consider your risk profile before deciding whether or not to provide you with health insurance. If your new insurance provider decides to insure you, they must underwrite your policy within 15 days. If you miss this deadline, you are assumed to be insured by the new insurance company.
While IRDAI gave all policyholders the ability to request portability, it also granted health insurance providers a right to refuse these requests. As a result, the underwriter examines each request for portability just like a new request.
When a health insurance provider receives a request for portability, the underwriter evaluates the risk exposure to determine the premium required to be charged. If the insurer determines that the plan is not favourable, it may be rejected. In that situation, the policyholder won’t have any choice but to keep his or her existing insurance policy.
By carefully considering all the factors, the policyholder can make informed decisions on switching the health policy, and ensuring that the new policy meets his present requirements.
Dwight D. Eisenhower rightly said that “A people that values its privileges above their principles soon loses both.” Thus, if individuals prioritize their privileges (e.g., seeking the lowest premium or most extensive coverage) above their principles (e.g., equitable access, affordability for all, continuity of care), they may compromise the very principles that underpin the purpose of their health insurance cover. Therefore, the quote serves as a reminder that it is crucial to prioritize and uphold the common need of your health insurance policy, rather than simply pursuing short-term/ certain influencing privileges, to ensure a robust and equitable healthcare system for yourself.