Health Insurance Portability: Benefits and How to Transfer

Despite meticulous research in choosing the best Health Insurance Policy, it is quite possible that the initial choices you made prove inadequate as the life stage changes. The disparity between anticipated needs and evolving circumstances can leave policyholders dissatisfied. Recognising this, the Insurance Regulatory and Development Authority of India (IRDAI) introduced a pivotal solution in 2011: Health Insurance Portability.

Health Insurance Portability allows individuals to seamlessly transfer their policies between insurance providers without forfeiting accrued benefits. This innovation acknowledges policyholders' evolving needs and fosters competition among insurers, incentivising enhanced services and customer-centric approaches. This article elucidates the benefits of Health Insurance Portability and navigates the intricacies of the transfer process, ensuring informed decisions in safeguarding health and financial well-being.

[Also Read: Top 12 Tips to Make the Most Out of Your Health Insurance Plan]

What Is Health Insurance Portability?

The Insurance Regulatory and Development Authority of India (IRDAI) allows individuals dissatisfied with their current health insurance policy features to opt for health insurance policy portability. This provision enables policyholders to shift their policy from their current insurer to a different insurance provider without losing the benefits accrued under their existing policy.

Furthermore, this feature can facilitate a transition from an individual health plan to a Family Floater Health Insurance Plan, subject to approval from the underwriter.

While health insurance portability has been widely embraced in car insurance, it is now extensively offered by all health insurance providers in India. The process of transitioning from one insurer to another while maintaining continuity benefits, such as coverage for pre-existing conditions and adherence to waiting periods, is referred to as health insurance plan porting.

Health insurance portability includes all indemnity-based individual health insurance policies, family floater health insurance policies, and group health insurance policies. Both the IRDAI and insurers do not levy any charges for providing the portability facility in Health Insurance.

The porting process involves the transfer of various components, including the current sum insured, insured members, accumulated No Claim Bonus (NCB), waiting periods for pre-existing diseases, waiting periods for specific diseases, and maternity benefit waiting periods.

What Are the Benefits of Porting Your Health Insurance Policy?

1. Enhanced Service Quality:

Transitioning to an insurer known for superior service can improve your overall experience, spanning policy purchase to claim settlement.

2. Increased Transparency in Policy Terms:

Switching insurers can be beneficial if your current policy contains obscure terms and conditions that may negatively affect your coverage.

[Also Read: Health Insurance vs Mediclaim: 9 Crucial Differences You Need to Know]

3. Streamlined Claim Settlement:

Porting enables you to shift to an insurer with an easy, quick, and more efficient claim settlement process, addressing concerns associated with delays or insufficient processing.

4. Potential Cost Reductions:

Moving to a competitor offering lower premiums can provide similar benefits at a more affordable rate.

5. Tailored Coverage:

During the porting process, you can increase the sum insured and extend policy coverage, subject to approval from the new insurer. This will enable you to access additional coverage or benefits unavailable with your current insurer.

6. Waiting Period Considerations:

You are exempt from undergoing the waiting period clause again if it has already been served under your current health insurance policy. The surviving waiting period will be subtracted from the waiting period of your new policy. However, if the new insurer introduces additional coverage with a mandatory waiting period, they must notify you before issuing the health insurance policy.

7. Grace Period Extension:

An additional grace period is provided while your health insurance is still under processing. The premium is calculated based on the duration your old policy was active.

8. No Claim Bonus (NCB) Transfer:

Your new insurer will grant a premium discount based on your previous policy's accumulated No Claim Bonus (NCB). This is a significant benefit of porting, which ensures the retention of NCB benefits.

9. Fee-Free Service:

Health insurance portability service is offered without any charges, and insurers are barred from imposing fees for providing this facility.

10. Enhanced Overall Value:

After thorough research and comparison, opting for a new policy with better overall value in terms of offerings can be a wise decision.

[Also Read: Health Insurance on a Budget: Maximising Coverage and Minimising Costs]

What Are the Directives Governing Health Insurance Portability?

The IRDAI has established specific guidelines and regulations that insurers and policyholders must adhere to:

1. Policy Consistency:

Health Insurance Portability is permitted only among policies of the same type. This implies that a complete alteration in the plan, coverage, or policy type is not allowed. For instance, one can transition from one Basic Health Insurance Plan to another Basic Health Insurance Plan or from one Top-up Health Insurance Plan to another Top-up Plan.

2. Company Consistency:

The transition must occur between companies of the same type. For example, shifting from a general insurance company to another general insurance company or from a specialised health insurance company to another specialised health insurance company.

3. Renewal Timing:

Portability is exclusively permitted at the time of policy renewal and is not applicable at any other time.

4. Notifying the Insurer:

If opting for Health Insurance Portability, policyholders must formally notify their current insurer in writing at least 45 days in advance. Additionally, they should specify the insurer to which they intend to transfer.

5. Insurer Response:

Upon receiving a portability request, the new insurer is required to acknowledge it within three working days and render a decision within 15 days of receiving all necessary documents. Should there be any delays, the new insurer must solicit the current insurer to provide a short-term insurance cover. This interim cover, spanning up to 30 days, is priced proportionally based on the premium.

[Also Read: From Clicks to Coverage: The Benefits of Online Health Insurance Shopping]

How to Transfer Your Health Insurance Policy?

Here are the steps to transfer your Health Insurance Policy:

1. Selection:

Begin by identifying the Health Insurance Policy that best suits your needs. Once decided, proceed to the website of your chosen insurer to initiate a porting request. Alternatively, you can opt for offline methods by visiting the nearest branch or contacting the insurer's helpline.

2. Request Confirmation:

Upon receiving your request, a representative from the insurance company will contact you to verify the request and assist you through the porting procedure.

3. Documentation:

The insurer will furnish you with the IRDAI portability form and proposal form, which should be completed meticulously. Submit these forms along with the necessary documents as requested by the insurer.

4. Information Exchange:

The insurer will contact your current insurer to obtain your medical history and policy details. Such exchanges of information are facilitated through the IRDAI.

5. Underwriting:

Once all necessary details are received, the new insurer will commence the underwriting process. This involves an assessment of your profile by an underwriter to determine whether to approve your insurance proposal.

[Also Read: 10 Common Health Insurance Exclusions And How You Can Financially Prepare Yourself For Them]

6. Timely Processing:

The underwriting process must be completed within 15 days of receiving information from your current insurer. Failure to adhere to this timeline or any delays in the process imply coverage under the new Health Insurance Policy.

Common documents required for porting your Health Insurance Policy include the IRDAI portability form, proposal form, proof of identity, proof of address, existing insurance policy documents, documents related to medical and claim history, and a declaration of no-claim if applicable.

To conclude:

Facing a medical emergency can be financially and emotionally taxing. Insufficient health insurance coverage may lead to significant financial strain. Therefore, it's crucial to purchase health insurance after thoroughly considering various factors such as lifestyle, family needs, and medical history.

When porting your Health Insurance, carefully evaluate all aspects, including limits, coverage, clauses, inclusions, exclusions, premiums, and exemptions, to avoid future disappointments. Opting for online purchases or porting can simplify the process and may even offer premium discounts. If you require further guidance, refer to our Comprehensive Guide to Buy a Health Insurance Policy in India.

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KETKI JADHAV is a Content Writer at PersonalFN since August 2021. She is an MBA (Finance) and has over seven years of experience in Retail Banking. Ketki specialises in covering articles around banking, insurance, personal finance, and mutual funds and has been doing it for over three years now.

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