In 2011, IRDA came out with regulations regarding portability to protect the interests of consumers. As per the portability guidelines, any insured person if not satisfied with his/her existing health policy can switch to another insurer of choice. The insured will get all the accrued continuity benefits in waiting periods provided there are no lapses in policy renewal.
The right reasons to port:
The primary consideration under which most people port their health insurance policy is low premiums. This factor however solely should not rule the porting decision. If there are too many inhibitory clauses in the policy which prevent the insured from optimally using the health cover, porting the policy would be a prudent choice. The other reasons for portability could be poor customer service or poor claims settlement ratio.
Few factors to bear in mind before porting your health insurance policy:
Medical History: Even while porting your health insurance policy, there could be chances of your application getting rejected. If you have a medical history or chronic pre-existing illness, the new insurer may reject your application. You might have to give a declaration of good health and make fresh disclosures on pre-existing health conditions. If you are above 45 years, chances are you would be asked to undergo medical tests as well. So, your decision to port the policy may not go through if you have a serious medical history.
Waiting Period: There are different types of waiting periods in health insurance policy – 30 days for fresh policies. And then there are waiting periods ranging from 2 years which cover cataract, kidney stone removal to 3-4 years for serious diseases like diabetes, cancer, cardiac problems, etc. While continuity benefits will apply, if your policy is relatively new, residual waiting period will still be applicable. So, suppose if you are porting a 3-year old policy to a new insurer having the same waiting periods, the 4-year waiting period will still be applicable. This implies that although you completed 3 years in the previous policy, you will have to wait for 1 year to file claims, if any, for pre-existing conditions.
Increase in Sum Assured: For any increase in sum assured, the entire fresh waiting period will be applicable. For e.g., you have an existing cover of Rs.5 lakh for which you have been regularly paying premiums for 5 years. Now, you want to port your policy and also increase your sum assured by another Rs.5 lakh to Rs.10 lakh. While there will be no waiting period applicable on the old cover in the event of any claims, you will not be able to utilise the additional Rs.5 lakh cover until the entire waiting period is served.
Age: With increase in age, most insurers are reluctant to approve portability applications of senior citizens. Even if the application is accepted, it comes with high loading costs and co-payment clause.
On receipt of the porting request, the new insurer approaches your existing insurer to get further details regarding your medical and claims history. The new insurer usually communicates within 15 days whether it accepts or rejects your application.
If you are looking to port your plan, examine the features and benefits of your new health plan thoroughly first. Start looking out for new plans at least 3 months before the due date so that you can research well and find the best plan. Bear the above points in mind before porting your old policy.