Health Insurance Portability
Health Insurance Portability Overview:
Health insurance portability is a feature that empowers policyholders to transfer from their current insurance provider to either acquire a superior health insurance policy or receive enhanced services from a different insurer. Through portability, policyholders retain accrued renewal benefits when transitioning to a new health insurance company. It’s important to note that portability can only be initiated during the policy renewal period.
Understanding Health Insurance Portability:
Health insurance portability involves the seamless transfer of an existing health insurance policy to a new one from a different insurer, preserving accrued benefits such as No Claim Bonus (NCB), waiting period credit, and free medical check-ups. This affords customers the flexibility to switch to a more satisfactory health insurance provider without forfeiting benefits. Every policyholder is eligible for portability, provided their previous health insurance policy was renewed without any breaks.
Application Process for Health Insurance Portability:
The steps to apply for health insurance portability are as follows:
- Send Portability Request:
- Submit a portability request to the desired insurance company at least 45 days before the existing policy is due for renewal.
- Receive Proposal Forms:
- Upon receiving the portability request, the new insurer provides proposal and portability forms, along with details of available health insurance plans.
- Select Health Plan and Submit Forms:
- Choose the health plan for porting and submit the filled proposal and portability forms to the new insurer.
- Data Exchange with Previous Insurer:
- The new insurer contacts the previous insurer to obtain details like claim history, medical records, etc., which can also be accessed from the IRDAI’s website.
- Decision on Portability:
- The new insurer decides on accepting or rejecting the portability request within 15 days of receiving all required information. If a decision is not made within this period, the porting application must be accepted.
Required Documents for Health Insurance Portability:
Essential documents needed for health insurance portability include:
- Identity proof
- Address proof
- From the Previous Insurer:
- Previous years’ policy certificates
- Latest renewal notice indicating continuity in coverage
- Self-declaration for no claim, if applicable
- Documents related to any filed claims
- From the New Insurer:
- Proposal form
- Portability form
Benefits of Porting a Health Insurance Policy:
Key benefits of health insurance portability include:
- Protection of No Claim Bonus (NCB):
- The policyholder retains the accumulated NCB even after porting to a new health insurance policy.
- Carry Forward of Waiting Period Credit:
- The waiting period served under the existing policy is carried forward to the new policy after portability.
- Lower Premiums:
- Policyholders can switch to a health plan with similar coverage but lower premiums, especially beneficial after a claim raises existing policy premiums.
- Better Services:
- Portability allows shifting to another insurer with improved services if the current insurer’s services are unsatisfactory.
Health Insurance Portability Rules:
The Insurance Regulatory and Development Authority of India (IRDAI) has established rules for health insurance portability, governing both policyholders and insurance companies. These rules ensure a transparent and fair process for porting health insurance plans in India.
| Categories | Health Insurance Portability Rules |
|---|---|
| Types of Health Insurance Policies Permitted | Only similar health policies can be ported. For example, a policyholder can switch from one reimbursement health plan to another or from one top-up plan to another top-up insurance plan. Both family and individual health policies can be ported. |
| Company Type | Policyholders can port policies from any general or specialized insurance company to another specialized or general insurance company. |
| Health Insurance Portability Time | Health insurance portability can only be initiated at the time of current policy renewal and not during the policy period. |
| Existing Policy Renewal | Policyholders must renew their health policies without any breaks to avail the portability facility. However, a gap due to insurer delays won’t be considered a break, and porting will be allowed. |
| Portability Intimation | Policyholders must file a portability request with the new insurance company at least 45 days before their existing policy renewal date. Also, they should notify the current insurance company in writing about the portability request by mentioning the new insurer. |
| Acknowledgement | Health insurance companies must acknowledge a portability application within 3 days of receiving it. |
| Porting Charges | No porting charges are applicable. |
| Premiums | Premiums will be charged as per the underwriting norms of the new insurer, and hence, premiums may not remain the same even for similar coverage. Moreover, individuals in the high-risk category, like senior citizens, may have to pay a higher premium after porting. |
| Sum Insured | Policyholders can choose to increase their minimum sum insured amount when they port. As per IRDAI’s guidelines, new insurers must provide a minimum sum insured equal to the old policy’s original sum insured. Approval of the increased sum insured is subject to acceptance by the new insurer. |
| Pre-existing Diseases Waiting Period | If a person ports to a new policy with an increased pre-existing disease waiting period, the entire waiting period has to be served minus the period already served under the previous policy. For example, if the policyholder has already served a 3-year waiting period under the previous health policy and the new policy has a waiting period of 4 years, then only one additional year needs to be served to get pre-existing disease coverage under the new policy. |
| Shifting Plans Within the Same Company | Policyholders can migrate from one health insurance plan to another plan within the same company. |
According to the guidelines set by IRDAI, health insurance companies are required to accept requests for portability either at policy renewal or at the end of the specified exit age. This should be accompanied by offering appropriate credits for all preceding policy years, contingent upon the condition that the policy has been renewed without any breaks.
Drawbacks of Health Insurance Portability
Examine the downsides of transferring a health insurance policy:
- Only Possible at Renewal
Portability is only feasible when the existing health insurance policy is up for renewal and not at any point throughout the policy year.
- Applicable to Similar Plans
Policyholders can only transfer to similar types of health policies and not all categories of plans. For instance, a top-up plan cannot be transferred to a critical illness insurance plan.
- Higher Premiums
In certain cases, policyholders may need to pay a higher premium to access additional coverage and benefits under the new health policy after the transfer.
- Loss of Benefits
Policyholders opting to switch from group insurance policies to individual policies might forfeit some benefits included in the previous policy.
Rejection of Health Insurance Portability Requests
While IRDAI empowers policyholders with the right to portability, health insurance companies also have the authority to reject such requests. Consequently, all portability requests are treated as new and subject to scrutiny by the underwriter.
Upon receiving a portability request, the underwriter evaluates the risk exposure to determine the applicable premium. The proposal can be rejected if deemed unfavorable, leaving the policyholder with no choice but to stick with the existing insurance provider.
Common Reasons for Rejection of Health Insurance Portability Requests
Frequent reasons for rejecting portability requests include:
- Inadequate information
- Delay in document submission
- Poor recent claim history
- Substantial differences in inclusions, exclusions, and other features between current and new policies
- Unavailability of previous policy documents
- Break in policy renewal
- Higher age, especially for senior citizens
- Poor medical history
- Switching from a floater policy to an individual cover
Common Reasons to Opt for Health Insurance Portability
Consider these common reasons for choosing health insurance portability:
- Unsatisfactory service quality
- Insufficient coverage for specific health issues
- Tedious and slow claim settlement process
- Delayed reimbursements
- Increased premium after a claim
- Lack of transparency due to hidden clauses and conditions
- Unfavorable co-payment clauses
- Restrictions on room rent
- Attractive offers from another health insurance provider
- Absence of personalized services from a general health insurance company
Factors to Consider Before Porting a Health Insurance Policy
Before applying for health insurance portability, consider the following:
- Analyze the coverage and benefits of the new health insurance plan, comparing features like waiting periods, exclusions, and co-payments with the existing plan.
- Check the Incurred Claims Ratio (ICR) and Claims Settlement Ratio (CSR) of the preferred health insurance provider.
- Cross-check the terms and conditions of the new policy for any imposed waiting period or permanent exclusion.
- Begin searching for new health plans for porting at least three months before the existing policy’s due date.
- If the existing policy is excessively priced or has a poor claim settlement ratio, porting may be preferable.
- Be aware that underwriting norms, terms, conditions, and reasons for portability rejection may vary among insurance companies.
Porting from Group Health Insurance to Individual Health Cover
Individuals covered under group health insurance policies can transfer to an individual health cover. However, switching to another insurer is only allowed after switching to an individual health plan offered by the current insurer, and this can occur after one year.
Health Insurance Portability FAQs
Q1. Can I transfer my health insurance policy to another company?
A1. Yes, you can transfer your existing health insurance policy to another company using the health insurance portability facility. However, portability is only possible at the time of existing policy renewal.
Q2. When is the right time to port a health insurance policy?
A2. A policyholder should apply for porting a health insurance policy at least 45 days before the renewal date.
Q3. Do I need to pay an extra premium to port my health insurance policy?
A3. No, you do not have to pay any additional amount to port your health insurance policy, as portability does not involve any charges. You only need to pay the premium of the new health policy.
Q4. Can I port my group health insurance policy to an individual policy from another insurance company?
A4. Yes, you can port your existing group health insurance policy to an individual health policy from another insurance company. But first, you need to convert your group health policy into an individual health insurance policy offered by your insurance company. After one year, you will be eligible to port the policy to an individual health plan offered by another company.
Q5. How long does it take to port a health insurance policy?
A5. As per the IRDAI’s guidelines, a health insurance company must acknowledge a portability request within 3 days of receiving it. However, they need to either accept or reject a portability request within 15 days of receiving all the requested documents. In case of any delay, they will have to accept your portability request.
Q6. Can I port health insurance online?
A6. Yes, health insurance portability online can be done by visiting the website of the new health insurance company.
Q7. How many times can you port health insurance?
A7. You can port your health insurance policy as many times as you like, provided the new insurance company accepts your portability requests. However, porting is possible only at the time of existing policy renewal.
Q8. How many days before we can port health insurance?
A8. You can port your health insurance policy at least 45 days before the renewal date of your existing policy.
Q9. Is porting allowed in health insurance?
A9. Yes, porting of a health insurance policy is allowed but only at the time of renewal.
Q10. What is the difference between migration and portability?
A10. If you change your health insurance policy within the same insurance company, then it is termed as migration. However, if you switch your health policy to a policy from another insurance company, then it is known as portability.