Here's why you should avail the porting facility in health insurance policies

In October 2011, IRDAI allowed porting of health insurance policies. The porting rule allows a customer to shift his/her health insurance from one insurer to the other as per their wish.

An individual can switch his/her health insurance policy to another insurer with the same sum insured and benefits as with the previous insurer. The rule also extends insurers a right to accept or reject a porting request according to their underwriting guidelines and policies.

Should you look at porting your health insurance policy?

Let us look at the benefits and pitfalls of the porting facility.

— The porting facility can be availed without any additional charge.

— If you’ve had a bad experience with your current insurer in terms of customer service or claims process delays or grievances, you can think of moving to another insurer.

— If you discovered any clauses in fine print in your policy terms at the time of claim, you may look at switching to another insurer who can provide the required benefits.

— If you purchased your policy long ago and the cap on room rent, diagnostics tests, sub limits, and other benefits look inadequate with the high medical inflation and expensive medical care today, you can look for a plan that offers comprehensive features.

— If your policy purchased in the past has a low sum assured, you can port your current plan without losing the continuity benefits and apply for additional cover and benefits.

— If there are limits on disease specific coverage in your current plan, you may look for a better coverage for the specific ailment with other insurers.

— Many new products are available in the market which have better features added in light of new guidelines issued by IRDAI. You may get a better deal on policy premium, wider coverage and features from new product offers in the market like telemedicine, counselling, OPD covers, free medical check-ups etc.

— Not getting service from agent ,who only appears once a year to collect the renewal cheque. Why not change him ?

Things you must know about portability:

— Portability is allowed only on Indemnity Health Insurance Plans.

— Porting request must be submitted to the new insurer at least 45-60 days prior to renewal date/expiry of the existing policy.

— You are required to fill in a proposal form and provide all existing policy details and documents for last few years. Your application may get rejected if you provide incomplete information.

— The new insurer will take details of existing policy and your claim history from your insurer. The new Insurer needs to revert to your porting application within 15 days of accepting the proposal.

— When you apply for porting, you will go through same underwriting process as for a new policy.

— The new insurer may have their own guidelines and may be different from previous insurer. They will assess your application and may take a different view on risk profile.

— The new Insurer has the right to reject the portability request basis their underwriting policy.

— If you take increased cover from the new insurer, the additional cover will be treated like a new insurance policy with same waiting period clause applicable for a fresh cover. In case you are hospitalised for a pre-existing illness, the additional cover cannot be claimed unless the waiting period has been served.

— The waiting period served in your existing policy is transferred for the sum insured in the previous policy. The No claims bonus feature in your existing policy giving you additional sum insured will not be transferred. The added sum assured with be treated as base sum insured in the new policy.

— Insurer will look at your claim history and in case there have been many claims, your application may be rejected, or may incur premium loading or co-pay clauses.

— For young people, portability is a relatively easy process but if you are above a certain age, you may be asked to undergo a medical test. Any illness at this stage may become a reason for rejection.

— For senior citizens the portability is extremely difficult as insurers expect a high incidence of disease and claims in such policies.

Therefore, it is important to clearly understand the features and benefits in your existing policy and compare them to the new plan, to get an absolutely clear picture. It is also very important to understand the policy porting process.

One must provide complete information about the existing policy, current health status, pre-existing ailments and claims made in the past. You must submit all policy documents so that the process is initiated and completed well in time.

As a general rule, it is pertinent to always maintain a file of all medical reports ,diagnostic tests, X-rays, MRI ,policy and claim documents so that these can be referred by doctors. These are also useful in answering queries raised by Claims department .

Do not allow any break in the policy that may leave you uninsured. In case of any delay in porting process avail the facility of 1-month grace period given to you and pay premium to present insurer. Knowledge and timely action are essential to keep you and your family secure with best options available.

(The writer is director and founder of RIA Insurance Brokers. Views expressed are personal)