23 Jul 2017 17:28 IST

Nuances of porting a health policy

If you are unhappy with your health insurance policy, you can port to a new provider

If you don’t like your mobile service provider, you can port to another provider without the hassle of having to change your number. Similarly, if you are unhappy with the services of your health insurance provider or the policy, you can port to a new policy.

Even as the insurance watchdog IRDAI has allowed this porting since 2011, many are still unaware of the ins and outs of porting a health insurance policy. Here’s a lowdown.

How it works

Portability is allowed in all health insurance products. But you can shift only between two similar policies. For instance, porting from a mediclaim policy of one insurer to that of another insurance company is allowed, but not from a mediclaim policy to, say, a personal accident cover or a critical illness cover.

Also, remember that porting is allowed only at the time of renewing a policy. Regulation doesn’t allow switching between the policy period.

When porting from one insurer to another, you will be allowed continuity benefit of the waiting period, that is, you will be allowed to carry forward the time spent on the earlier policy. Say your current policy has a four-year waiting period for pre-existing diseases and you have already spent two years on it; if the new policy has a two-year waiting period, your pre-existing diseases will be covered from day 1 in the new policy. Continuity benefit is given on waiting period for specific ailments such as joint replacement or cataract too.

The other benefit given to those porting policies is the transfer of no claim bonus (NCB). Say your sum insured is ₹5 lakh and you renewed the policy for two years without a claim; and thanks to the NCB, the sum insured (SI) has increased to ₹6 lakh. Now, if you decide to port before renewing it for the third year, you are eligible for a SI of up to ₹6 lakh in the new policy. However, note that the premium will be calculated based on the higher sum insured, that is, ₹6 lakh in this case.

If you stay with your old insurer, you will be paying the premium only for the original sum insured.

Waiting periods and NCB benefit are the only two things that can be transferred during porting. Sub-limits on expenses, exclusions, day-care coverage and other policy features and terms and conditions cannot be ported; it will be as per the new policy. Also, even if you choose the same SI, there is a chance that the premium may go up. This is because the pricing depends on the underwriting procedure of the new insurer.

Process

If you want to port to another insurer, you should make a request at least 45 days before the expiry of the policy. This request has to be made to the new insurer in the prescribed form. You will be required to give reasons for porting, number of claims made on the old policy, total amount claimed and submit copy of the policy.

The insurer will obtain your claim records and medical history from the previous insurer through IRDAI. In some cases, undergoing a medical test may be mandatory, if the under writing rules of the new insurer so require.

Conditions

You will be eligible to port your health insurance policy only if you had renewed it without a break. Remember, insurers are not mandated to take up all requests that come in for porting. So, there is chance that the new insurer may reject your proposal.

Also, with higher age, and new health complications, if any, the premium may be higher.

If you are young (under 40) and healthy, and unhappy with your current health insurance provider or the policy, it is suggested that you buy another policy afresh and not go through the hassle of porting.

But, if you are already 40-plus, you should look at the porting option. If you take up a new policy, you may have to wait for another three or four years to cover pre-existing disease and, in that time, chances are high that other age-related medical issues may affect you.

Recommended for you