Want to port your health insurance policy? Here are tips

Adhil Shetty
BankBazaar.com
In present times, an insurance cover, be it general or life insurance,has become inevitable as uncertainties and risks lurk in every corner.Cost of medical care have surged, so much so that even a person hailing from families of affluence will find the going tough while footing the medical bills.

Now, consider this: what if you have a health insurance cover, but have chosen the wrong insurance policy or the wrong insurance policy provider? Or, do you have a group medical cover, which you want to convert to a personal policy? What’s your next step in that case? That’s where insurance portability comes into the picture, which ensures that the policyholder doesn’t lose any benefit while transferring the policy.

What’s insurance portability?

The insurance portability, which has parallels with the mobile number portability, helps one switch the health insurance cover from one company to another insurance provider without any hassles whatsoever. This means an insurance policyholder doesn’t have to lose the benefits accumulated in an insurance policy.

Earlier, when one made such a move, the policyholder had to forgo certain benefits such as waiting period for covering “pre-existing diseases”. This need not be the case anymore. The portability factor applies not only when one decides to change the insurer but also when one moves from one plan to another with the same insurer.

Prerequisites for insurance portability

• A policy can be ported only at the time of its renewal. This means that the new insurance cover period will be with the new insurance company.

• Besides the credit on waiting period, all the other terms and conditions of the new insurance policy, including the quantum of premium, will be decided by the new insurance company.

• The process of portability should be initiated at least 45 days before the date of renewal. As the first step, the policyholder should intimate the old insurance company about the desire to move to another insurer. The policyholder should also mention the insurer to whom the policy needs to be shifted.

• Make sure that the policy is renewed without a break to facilitate smooth portability of insurance policy. There is also a 30-day grace period if the portability process is underway.

• The new insurance company can take a call to reject the portability if the policyholder fails to pay the premium.

Converting group policy

• Group insurance can be converted to an individual policy with the same insurance company. However, the other terms and conditions as well as coverage may differ in individual policies.

• Group policies typically do not have a waiting period for pre-existing diseases. However, while converting a group plan to an individual plan, the insurer takes into account the earlier policy years for calculating the waiting period of the policy.

• The process of conversion is the same as that of any other case of insurance portability, but with a different form in many cases.

Rights of policyholders

• An insurance policyholder can move from and to any general insurance company or insurer specializing in providing health cover.

• Any individual or family policy could be ported by the insured.

• The new insurance company is bound to provide credit relating to waiting period on pre-existing conditions, which was accumulated through the old insurance company.

• The new insurance company also has to provide insurance cover at least up to the sum insured under the old insurance policy.

• The new insurer should complete the portability process as per the timeframe prescribed by the Insurance Regulatory and Development Authority of India (IRDA) regulations and guidelines. The new insurer should take a decision on portability proposal within 15 days.

• If the policy results in discontinuance due to any delay in accepting the portability proposal, the insurer shall not consider the policy as discontinuance and shall allow portability of the insurance policy.

What the policyholder may lose

The premium structure may change even for the same insurance cover after portability as the new insurers are free to fix their premium rates. People in the ‘high-risk’ category may have to shell out more premium after switching over to a new insurance company. A policyholder may also lose accumulated no-claim bonus while opting for insurance portability.

It is important to maintain proper records relating to the insurance cover to make portability hassle-free. Records such as policy certificates, age proof and renewal notices will help the new insurance company to evaluate the portability proposal and underwrite the insurance policy accordingly.

IRDA facility

The IRDA has created a web-based facility to get and maintain all data relating to health insurance policies issued by insurance companies to individuals. These details could be accessed by the new insurance company to which the policyholder wishes to port the policy. This facility helps the new insurer to collect data on the history of a policyholder’s health insurance.

Final word

If you are not happy with the existing insurer, insurance portability will pave way for a better insurance company. So the second time around, choose the right policy and right insurance company after taking into consideration your insurance coverage needs.
Source : Moneycontrol