Health Insurance Portability

Portability in health insurance is an option that allows the insured individual to switch from the existing health insurance company to another without losing the accumulated benefits. If you feel that your existing health insurance policy is not the right choice for you, and you want to get insurance coverage from any other insurance company or under a different health insurance policy, then portability is the right option for you. But note that medical insurance portability is only possible when you have renewed your existing health insurance policy without any break with the current insurance company. Also, you can port your existing health insurance policy to another only at the time of renewal.

The concept of medical insurance portability was introduced by the Insurance Regulatory And Development Authority of India (IRDAI) in 2011. IRDA is a body that works towards the welfare of insurance policyholders by laying down guidelines to protect their interests. Earlier, the policyholders used to face the disadvantage of switching from one insurance company to another as they lost their benefits including waiting periods and No Claim Bonus. However, the new portability rules introduced by the IRDA allow them to go for an insurance company of their choice without having to worry about losing the benefits.

Purchasing a useful health insurance policy is a thoughtful process that involves the comparison and analysis of various health insurance plans in the market. But even after thoughtful planning, there can be some reasons that can compel the insured to switch from one insurance company to another. For example, someone might switch from one health insurance company to another because their existing insurance company has increased the health insurance premium. Other reasons to switch can be shifting of location by the insured, unavailability of a network hospital near their residence, or dissatisfaction with the services.

The procedure of moving from one insurance company to another insurance company has now been simplified and made highly convenient for the policyholders. Given below are three steps to be followed in order to port a health insurance policy:

1. Fill up the portability form with the details of the existing health insurance policy.
2. Fill up the proposal form with details of the new insurance company the insured wishes to switch to.
3. Submit the documents required and pay the health insurance premium.

Documents Required for Health Insurance Portability

The process of medical insurance portability may be different for every insurance company, and hence, the documents required may differ too. To confirm the same, you must get in touch with your health insurance company. Some documents that you may require are mentioned below:

• Address proof
• Identity proof
• Proposal form
• IRDAI portability form
• Insurance policy
• Declaration of no claims, if possible
• Claim history
• Documents related to medical history

Advantages of Health Insurance Portability

Switching to another health insurance policy or health insurance company has its own set of advantages and disadvantages. Some advantages are explained below:

1. Customize Your Policy: When porting your health insurance policy at the time of renewal, you can analyze your health insurance requirements as well as policy to check if you need to make any changes to the policy. For instance, you may want to increase your sum insured limit or may want to remove or add a new member to the policy.
2. No Claim Bonus: You must have the No Claim Bonus from your previous policy as a reward for not making any claim during the policy year. You can transfer this NCB to your new health insurance policy at the time of portability. Thus, portability helps you to continue availing No Claim Bonus by leading a healthy lifestyle.
3. Coverage Benefits: Not only accumulated benefits such as waiting period benefits or No Claim Bonus, but health insurance portability also allows you to avail yourself of coverage benefits similar to your previous health insurance policy, with some slight changes with the new insurer.
4. Premium: As there are several health insurance companies in the market, it increases the competition amongst them. This can sometimes prove to be beneficial for the policy buyers or those looking for a switch as they are offered health insurance plans at comparatively lesser premiums.

Disadvantages of Health Insurance Portability

Explained below are some disadvantages of a port health insurance policy to a new health insurance company:

1. Porting on Renewal: The policyholders are not allowed to port their health insurance plans to a new one at any time during the policy term. Instead, they can only do so at the time of renewal. Hence, if the renewal date is far away, they will be required to wait for the right time to port their health insurance policies.
2. Change of Plans is Not Possible: Even when changing your health insurance company, you will not be allowed to completely switch to a new health insurance policy. You will be required to switch to a similar health insurance policy as the existing one. For instance, you cannot switch from an individual health insurance policy to a critical illness health insurance policy as the coverage benefits of both of them would be completely different.
3. Higher Premium for Added Coverage: At the time of health insurance portability, you may want to add some extra coverage benefits to your policy such as add-ons of the addition of a family member or an increase in the sum insured amount. This may lead to an increase in your health insurance premium.

Health Insurance Portability Rules

The policyholders are required to comply with the health insurance portability and its rules, as given below:

• The policyholders can port the health insurance policy only at the time of policy renewal. This means that the new policy term will be with the new insurance company.
• Keeping aside the waiting period credit, other terms and conditions of the policy including health insurance premium will be at the discretion of the new insurance company.
• 45 days prior to renewal, the policyholder is required to:

a. Write to the previous insurance company requesting to port the policy

b. Specify the new insurance company to which the policyholders wish to port to

c. Renew the health insurance policy without a break. Note that there is a grace period of 30 days if porting is under process

• Till the results of the portability request are awaited, the policyholders:

a. Must not cancel the existing health insurance policy until they receive a confirmed policy from the new insurance company or make a request in writing

b. Can request to extend the existing health insurance policy for a short period. They are also right to continue the health insurance policy with the existing insurance company.

Health Insurance Portability Rights for Policyholders

Policyholders have the following rights when it comes to health insurance portability:

• They can port their health insurance policy from and to any general insurance company or a health insurance company.
• They can port any individual health insurance policy or a family floater health insurance policy.
• The new insurance company will be required to give the insured the credit related to the waiting period for pre-existing diseases gained with the previous insurance company.
• The new insurance company will be required to insure the policyholder for at least up to the sum insured under the previous health insurance policy.
• The two insurance companies should complete the policy porting according to the timelines given by the IRDA regulations and guidelines under the Protection of Policyholders’ Interests.

Health Insurance Portability Rights for the Insurance Company

The IRDA has not only given portability rights to the insured but to the insurance companies as well, wherein the company can reject any port-in request. All the health insurance portability requests are considered new and are subject to scrutiny by the underwriter wherein the risk exposure is assessed in order to determine the health insurance premium. If it is found to be unfavorable, then the insurance company has the right to reject the portability request. Then the policyholder will have no other option than to continue with the existing health insurance company.

IRDA Facilitation

IRDA has created a web-based facility wherein the data about all the health insurance plans offered by insurance companies to individuals can be found. With the help of this, the new insurance company to which the policyholder wants to port the health insurance policy can easily access the data. The data can be related to the history of the health of the policyholder as well as benefits offered under the previous policy.

Can Health Insurance Portability Be Denied?

Yes. It is possible that your health insurance company denies your request for health insurance portability in the following cases:

• When incomplete information is provided: A health insurance company can reject your portability request in case you have provided incomplete or incorrect information to them. In case you have done so, you can rectify your mistake by getting in touch with the insurance company and sharing with them the correct information.
• When documents are not submitted timely: Once the insured has decided to port health insurance policy, then they are required to notify the new insurance company as well as provide them with the required documents on time. If the insured fails to submit the required documents on time, then the request for portability may be denied. Hence, you must make sure that the timeline is followed.
• Claim history: The chances of health insurance portability requests getting rejected are high if the insured’s claim history is not proper. The insurance company can reject the request in case there has been any fraud or misinterpretation of information found in previous claim requests or otherwise.