“Change is the only constant in this world” – This iconic statement is perhaps a reflection of our society, where change is natural and perhaps the only aspect of life which is predictable. Evolution is a natural phenomenon and it is human instinct to evolve over time, anybody or anything which doesn’t evolve will end up becoming redundant. Evolution led to the concept of “survival of the fittest”, a theory which opened our lives to better products and improved the quality of services considerably. Competition in any sphere is ultimately good for the overall health of a population, offering access to quality services at affordable rates.
Most things we do in our lives revolve around our wellbeing and overall health, which has led to a steep increase in health insurance providers, catering to our needs. India has witnessed a health revolution of sorts in recent times, with people waking up to the importance of health insurance and latching onto health insurance benefits.
Dissatisfaction is common among people, and it wouldn’t come as a surprise if policyholders are unhappy with their policies or the services offered to them. The Insurance Regulatory and Development Authority of India came up with a novel way to ensure that common people are not taken for a ride by health insurance providers, introducing the concept of Health Insurance Portability.
What is Health Insurance Portability?
Health Insurance Portability is a scheme through which policyholders can transfer their existing health insurance policies from their current provider to another provider. India is home to over 50 insurance providers, catering to health insurance needs of millions. Portability ensures that companies don’t take their customers for granted, strengthening competition and offering better options to existing customers. Customers who opt for portability can do so without worrying about losing any benefits accrued, having complete freedom to switch over to a better service provider.
When should you port?
Deciding when to choose medical insurance portability and move to another plan or service provider might seem confusing, but it can be simplified if certain points are kept in mind.
- Poor Service – It is time to port if your health insurance provider doesn’t live up to the promised quality of service. Companies might often fail to deliver on quality assurances and there is no point holding on to them in such cases.
- Additional Cover – Your existing health insurance provider might not offer sufficient cover against specific health issues which are of a concern to you. It might be the right time to move to a service provider which covers all your needs in such situations.
- Slow Claim Settlement – It might be the time to look for better companies if your provider has a bad history of slow claim settlements.
- Hidden Clauses – Transparency is not the first thing one associates with insurance providers. Hidden clauses might become a major concern during emergencies and it would be better to shift to a provider who is transparent, with no hidden clauses.
- Better Offering – It might be time to port if you are paying exorbitantly high amounts for services which can be availed for cheaper in another company. Intense competition ensures you can get better value for your money and land some great deals.
- Moving to specialised company – You could have a health insurance policy with a general insurance company, which pays more attention to its other offerings. In such cases you could consider moving from a generalised company to a specialised health insurance company, which could be more suited to your needs.
Advantages of Health Insurance Portability
- Customised policy – Portability allows policyholders to modify their policy to suit their current health requirements. One can add new nominees or opt for an additional cover, as per their lifestyle changes.
- New Sum Insured – In case of policy portability, the existing Sum Insured is added to the Accrued Bonus to give the new Sum Insured. The No Claim Bonus is also added to the new Sum Insured during portability.
- No time bound exclusions – Individuals can opt for portability without having to worry about any time bound exclusions.
- Continuation of previous benefits – All benefits of an old policy continue to remain in force even after portability.
- Lower premiums – Increasing competition ensures that companies are willing to offer existing benefits at lower premiums, offering policyholders the opportunity to save money.
- Better service – Policyholders can opt for a health insurance provider which is known for its impeccable service and attention to customers.
- Improved claim settlement – Policyholders might find the claim settlement process of their current provider slow and cumbersome. Portability allows them the option of moving to a company with better claim settlements.
- Transparency – Health Insurance Portability allows policyholders a chance to move to a service provider which follows transparent practices, avoiding hidden clauses and conditions.
Disadvantages of Medical Insurance Portability
- Timely – Policyholders can opt for portability only when their policy is due for renewal. Portability is not allowed at other times.
- No significant policy change - Policyholders cannot move to policies which are totally different. They can port to only similar types of policies.
- Higher premiums – Additional benefits could mean higher premiums, which can erase any monetary benefit.
- Loss of benefits – Policyholders who move from group insurance policies to individual policies might not get all the benefits included in their previous policy.
Rules Governing Health Insurance Portability
There are certain rules laid down by the Insurance Regulatory and Development Authority of India which must be kept in mind before opting for health insurance portability.
- Like-to-like health policies – Policyholders need to keep in mind that only like-to-like or similar health policies are portable, i.e. they can migrate from one basic reimbursement plan to another basic reimbursement plan or from one top-up plan to another top-up plan.
- General/Specialised portability – Policyholders can port their policies from any general/ specialised insurance company to any specialised/general insurance company.
- Policy types – Individual or family policies can be ported.
- Renewal – Health insurance portability is permitted only during the renewal stages of a current policy. Individuals cannot port their policies during other times.
- Notice – Individuals opting for health insurance portability need to notify their current insurance company in writing about the same, stating the company they wish to port their policy to. This should be done 45 days before their policy is due for renewal.
- Renewal – Policyholders should renew their policies without any break. A discontinuity in the policy due to delays by an insurer will not be treated as discontinuity and portability can continue.
- Acknowledgement – Insurers need to acknowledge applications for portability within three days.
Q. Is Health Insurance Portability applicable to all health products?
A. Portability is limited to products which cover similar risk, i.e. basic reimbursement to basic reimbursement policies or top-up to top-up policies.
Q. Are there any additional porting charges?
A. There are no porting charges and customers are expected to pay only for the premium they choose.
Q. Can my request for portability be rejected?
A. Yes, an insurer might reject the application for portability if it doesn’t match the company’s existing policies.
Q. Is there any grace period for policy renewal during portability?
A. Applicants get a 30 day grace period for policy renewal in cases where porting is underway.
Q. Does the minimum sum insured change on portability?
A. Policyholders can opt to increase their minimum sum insured during renewal. Insurers, however are expected to provide minimum insurance equivalent to the sum insured before portability.
Q. Can I opt for portability within the same company?
A. Yes, policyholders can opt to shift from one plan to another within the same company.
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GST rate of 18% applicable for all financial services effective July 1, 2017.
Disclaimer: Premiums may vary depending upon factors like age, location and prevailing taxes/GST.