Pros and Cons of Health Insurance Portability

‘Health is wealth’—This saying holds true in today’s time more than it ever did! Everything else is secondary to a healthy life. Naturally, the health insurance industry has seen a huge boost in business as people are motivated to buy the best health insurance policies for the optimum coverage of their medical expenses.

What is Health Insurance Portability?

The Health Insurance industry is a competitive one, the Insurance Regulatory and Development Authority of India (IRDA), allows the feature of portability of a health insurance policy, in case the policyholder is not satisfied with the features of his existing policy. This facility of Health Insurance Portability allows the policyholder to switch his policy from the existing insurance provider to another insurer without losing the benefits of his / her existing policy. You can also switch to a family-floater health plan from an individual plan by using this feature of portability. However, this is subject to underwriter’s approval.

Insurance Portability has been very prevalent in the motor industry and now it is widely available among all health insurance providers in India. So, when you shift out from one insurer without losing any continuity benefits like pre-existing disease coverage and waiting period continuity, it is called “Porting” the health insurance plan. 

Pros and Cons of Health Insurance Portability

Once you have identified the reasons for opting for portability of your health insurance policy, it is important to be aware of the various pros and cons of this feature.

Pros:

1. All benefits of your existing policy stay active even when you opt for portability
2. Your waiting period and continuity benefits do not get hampered with health insurance portability
3. Owing to a highly competitive health insurance market, the health insurance companies offer benefits at lower premiums
4. Portability also allows a customisation option of your policy through which you can suit the features of the policy as per your requirements
5. A new sum insured is calculated by clubbing the no claim bonus with the existing amount.

Cons:

1. Only products or policies with similar features can be opted for in portability
2. Portability can be opted for only when the renewal date is near
3. You might have to pay higher premiums for additional benefits
4. In case you want to port from group plans to an individual plan, some advantages of the group plan, you may lose out on certain advantages that you enjoy in the group plan

The Pros of How to Use Health Insurance Portability to Your Advantage

There could be multiple reasons why you might need to change your insurance provider rather than sticking on to the same insurer. However, the most popular reasons have been listed below:

1. Customer Service -If you are not happy with the post-sales servicing offered by your current insurer or the service quality not meeting the expected standard
2. Claim Delay/Rejection -If there has been a delay in the claim reimbursements or the entire claim settlement process has been cumbersome and slow, then there is a possible reason for dissatisfaction which could lead to porting of your health insurance policy.
3. Change in Offering -Attractive and better offerings in the palate of other Health Insurance providers than the existing insurance provider or there has been an unprecedented increase in premium. Or there are some hidden clauses of terms and conditions in the health insurance plan, then the possible solution is porting of your health insurance plan.
4. Restrictions in the Current Health Insurance Plan Like -

• Specific Health Issues not being covered by the insurance provider
• If your current plan has room rent capping or other claims restrictions
• If your current policy has some age-based or zonal co-payment
• If your policy does not cover your pre-existing ailments, etc.

In these cases, you can shift to another insurance company with the above-mentioned coverages

         5. Increase of Sum Insured- In case you wish to increase your coverage or enhance the same, but that facility is not available in your current health insurance plan, then you can simply port it to another plan with the necessary benefits.

Once you have decided on why you must port your health insurance policy, you must keep in mind certain aspects of portability:

The Cons that You Must Keep-in-mind If You Opt for Health Insurance Portability

Health Insurance is important, so, when you opt for portability of health insurance, it is advisable that you keep the following points in mind:

1. Cannot Port Features
   Remember that only the pre-existing diseases, waiting period and the bonus credits can be ported to the new health insurance policy but the features of the existing policy cannot be ported to the new one. 
2. Increase in Coverage is Subject to Underwriting Approval
   You can opt for an increase in coverage at the time of health insurance portability, but the same is subject to underwriting approval. If your health is good and the underwriter is willing to accept the risk at the requested premium, then your sum insured can rise. There is no guarantee of the same.
3. Additional Sum Insured has a Waiting Period
   There is a continuity of the waiting period for the existing sum insured. But for the additional sum insured, there would be a fresh waiting period from the date of porting the health insurance plan.

Remember to do the Following While Porting

1. Check
   All the restrictions based on diseases covered, age and hospitals and also all limits and sub-limits mentioned in the policy when opting for portability
2. Look Into
   The network of hospitals of the new insurance provider before switching as that is what comes in most in case of an emergency
3. Premium Vis-a-vis Coverage
   Give equal weightage to both low premium and maximum coverage of the diseases, when you switch to a new policy. If you choose to change your policy based only on the criteria of low premium, then the chances remain, that the insurance company might reduce the coverage and you may end up paying more for your medical needs when the time comes
4. Portability Request Form Timelines
   File your portability request at least 45 days before the date of renewal of the existing policy. In case the portability request takes more time to be processed, then you might have to renew your existing policy, so it is always safer to apply with ample time in hand.

Rules Applied In Health Insurance Portability

1. Permissible Policy Types
   Only similar policies can be ported by the insured person, which implies that reimbursement policy can be ported to another reimbursement policy or a top-up plan can be ported to another top-up plan of its kind. An individual or a family health insurance policy can be ported to a similar one only.
2. Permissible Company Type
   A policy can be ported from any general or specialised insurance company to another by the policyholder.
3. Renewal
   Portability of any health insurance policy is allowed at the time of renewal only. Hence, it is of utmost importance that health insurance plans are renewed on time without fail to enjoy this benefit.
4. Intimation
   The Insurance company should be intimated at least 45 days prior to the renewal of the policy if the policyholder wishes to opt for porting the same.
5. Acknowledgement
   The Insurance company would provide the acknowledgement of receipt of your application for portability within 3 days of the application.
6. Porting Charges
   No charges are levied by the insurance providers for porting of policies.
7. Premiums and Bonuses
   The insurers are free to levy premiums as per their underwriting norms thus resulting in varying premiums. Policyholders in the high-risk category may have to pay higher premiums in case of porting their policies.
8. Grace Period
   The applicants of portability are eligible for a grace period of 30 days while the application is under process. The insured person has to pay the premium on a pro-rata basis during this time. IRDA guidelines limit the insurers from forcing the policyholder to pay the premium for the whole year.
9. Sum Insured
   An increase in the minimum sum insured may be sought for, by the policyholder during porting of the policy. However, it is the discretion of the insurance company to approve the enhanced sum insured.
10. Waiting Period of Pre- existing Diseases
    In case the policyholder is opting for the increased sum insured then he will have to serve the waiting period of pre-existing diseases as per the new policy guidelines.

Step by Step Guide for the Process of Portability

1. All forms associated with Health Insurance Portability are to be filled by you.
2. The incumbent insurer will check all your details within seven days of your application.
3. In order to port the policy, the insurer will have to pass all your required details (in the prescribed format) through the IRDA portal.
4. Then the company will have to process all the details further as per their underwriting regulations
5. Your application will be processed by the company and finally, you will be offered a proposal within 15 days of your application
6. However, if there is an unnecessary time-lapse on the part of the company, they would be bound to accept your request by any means.

Documentation Required for Porting

The following documents of the existing insurer are required for porting of a Health Insurance policy:

1. Previous policy certificates
2. The latest renewal notice mentioning premium, coverage, continuity, etc.
3. Self-declaration of the policyholder in case of no claim case.
4. All related documents of any claim filed till then, eg. Investigation reports, discharge summary, etc.

Documents Required for the New Insurer

1. Proposal and Portability Forms duly filled in by the applicant
2. KYC of the policyholder, i.e. the identity and age proof of the insured

Valid Reasons for Rejection of Portability Request 

Just as customers have been given the right to opt for the portability option by the IRDA guidelines, so have the insurance companies been given the right to reject or accept a portability request received at their end. The portability request may be rejected by insurance companies vide any of the following reasons as per the IRDA guidelines:

• If the Policy has not been renewed on time/ Break-in policy renewal
• Incomplete or false information
• Documents are not submitted within the given timelines
• Incorrect Claim History
• Policy documents not accessible

Conclusion

It is not advisable to opt for a new policy unless you are totally sure about the features of the same. You might regret any hasty decision, at a later date. The portability of a Cashless health insurance policy is a beneficial and profitable option if it is utilised prudently.