Have you ever gone backpacking?

Maybe, not.

Imagine you are a backpacker.

A backpacker packs only clothes and things that are necessary to travel light. So, everything you pack turns out to be light-weight and easy to carry. Right?

Now that all your essentials are portable, have you considered porting your health insurance policy as well?

Yes, it’s true.
Now, you can port your health insurance policy from one insurer to another.

What is health insurance policy portability?

Let us suppose, you are unhappy with the health insurance policy you’ve bought. It can be either due to the high premium, several caps, or any other criteria.

Some of the common issues policyholders, like you, face are reimbursement limits for different medical procedures, age caps for renewal, increasing premiums, lengthy claim settlement process, limits on hospital room rent, co-payment clauses, and so on.

And this results in the urge of switching your policy from one insurer to another.

With the facility to port, you can move your health insurance policy from one insurer to another. All this is possible without losing out on the benefits such as No Claim Bonus (NCB), you would have accumulated in your current policy over the years.

How to port your health insurance policy?

You can apply for portability at the time of renewal of your insurance policy. But make sure you apply at least 45 days prior to the expiry date of your current policy (but not 60 days early of its expiry).

Fill the Portability form along with Proposal form, which is available on the Insurance Regulatory and Development and Development Authority’s (IRDA’s) portal and submit it to the insurance company. Ensure you provide all the details of existing policy along with the details of the policy you wish to opt for or port.

Your existing policy should be on-going without any break. If you miss out on renewing your policy or do not pay your premium under any circumstances, it is marked as a break in your policy. This will put you in a bad light while applying for portability.

However, if there’s a discontinuance due to delay caused by the insurer, it shall permit portability. Further, the insurers shall strictly comply with Regulation 4(6) of the IRDA (Protection of policyholders’ interests) Regulations, 2002 in accepting the proposals when the policyholder is switching from one insurer to other.

The web-based facility created by the IRDA maintains data about all health insurance policies issued by insurance companies to individuals. This can be accessed by the new insurer that a policyholder wishes to port his policy to. This makes it easier for the new insurer to obtain the historical data of your health insurance at one location.

Your existing insurer has to approve your portability request, but the new insurer has the right to reject your request. Within 7 days of your request being raised, the insurer has to furnish all details on the IRDA’s common data sharing portal. And the new insurer has to declare its decision within 15 days of receiving the request.

If, in any case, the insurer fails to meet the deadline, the insurer has to mandatorily accept your application.

A few pre-conditions for portability…

Type of Policy – A ‘group insurance policy’ issued by a particular insurance company can be ported under group insurance of another insurer. Similarly, a Floater Health Insurance cannot be ported to a critical illness plan.

Hence, all the policies under the same category are portable.

Carry forward credits gained – A health insurance company may offer a percentage increase in the sum insured or a discount on the premium payable, if you haven’t made any claim in a particular year. Hence, all the NCB that you would have accumulated can be transferred while porting. So, for instance, in case your sum insured is Rs 5 lakh and you have a no-claim bonus of Rs 30,000 standing to the credit accumulated over last 5 years, the sum insured under the newly ported policy would be Rs 5,30,000, or you may get a better bargain while paying the premiums.

Similarly, other aspects like waiting period, etc. should be looked into.

However, if your previous policy has a waiting period of three years (which, let’s suppose, you have already served), while the new insurer has a 4-year waiting period; you will have to serve that additional 1 year. Hence, you need to study and compare the inclusions, exclusions, and features of all the existing as well as new policy. For instance, your existing policy could have exclusion of 10 critical illnesses, while the new one has 15 exclusions; you need to understand which policy works best for you.

Underwriting Criteria – When you apply for an insurance policy, you undergo an underwriting scrutiny process. This remains the same even when you port your policy. Each insurer has its own process to gauge the applicant’s risk profile. And if you fail to meet upto their criteria, the insurer has the right to reject your application. For example, if the insurer is very strict about the body mass index of the applicant and you do not meet up their set limits, your application might get turned down.

Some of the most common reasons for a rejection are as follows:

• Age: You might have bought the policy when you were young and healthy. However, now as you have grown older the risk due to illnesses may have increased. Hence, many insurers might be sceptical in accepting your portability request, especially if you 70 years of age and above.
   
• Bad claim history: If you are facing chronic ailments that require constant medical attention, the chances of rejection are higher. Similarly, if you have multiple claim issues lodged recently, the insurer could become suspicious.
   
• High sum insured: If you apply for a higher sum assured during portability, the insurer might become a bit sceptical and scrutinize your case further. And, if in the recent past you made a claim, chances of rejection increase again.
   

Should you port your health insurance policy?

This facility is good if you are dissatisfied with the existing insurance policy. Usually, a portability request arises after experiencing a fair amount of discontentment in the claiming process. But remember, insurers have the right to reject your portability request for varied reasons.

If you are below 45 years of age, with a credible claim history, you can opt for portability to maximize the benefits. However, beware of all the exclusions and think through thoroughly. In case, you fall into a higher age bracket and have certain health issues, continue with the existing policy and seek better facilities from your existing insurer.

• There are no extra charges for portability
• Initiate the portability request process well in advance (Keep in mind the expiry date of your existing policy)
• Collate all your necessary documents at one location at the right time
• Understand all the features of the new policy
• Compare these features with your existing policy
• Learn everything about the restrictions and caps; and
• Given that healthcare cost is on rise, ensure you are insured optimally

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