Portability is a term we all might have heard of when it comes to our phone service provider. If you are unhappy with their services, you can simply port to another telecom provider and still retain your original mobile number. Portability in health insurance, too, works on a similar concept.
Let’s say you are unhappy with your existing health insurance provider, you can choose to port your health insurance to any general insurance or standalone health insurance company and at the same time also retain all the continuity benefits.
The feature of health insurance porting becomes particularly valuable when the policyholder has a need for expanded coverage and the same is not being offered by the existing insurer or in cases when one is dissatisfied with the current insurer. This option allows the policyholders to port to a more suitable plan, or an insurer better suited to their needs without losing out on many types of benefits.
To effectively navigate the process of health insurance porting, it is important that policyholders be aware of certain conditions. Firstly, keep in mind that porting can only be done during the renewal period and one cannot leave the insurer abruptly to port to a new policy. The policyholder must also notify their current insurer of their intention to port to another insurer in writing at least 45 days prior to (but not before 60 days) the policy renewal date.
If in case the policy lapses, the proposal to port might be rejected, leaving the individual with no choice but to opt for a new health insurance policy and lose out on benefits like zero waiting period and cumulative bonus.
If the policy expires while the porting is under process, then the policyholder can request for a grace period from their current insurer. However, health insurance porting is subject to certain limitations on alterations to policy type and coverage.
Hence, there are a few things to be mindful of before switching the health insurance policy to ensure a seamless process with no loss of benefits. Consider the following factors before porting:
Cumulative bonus: One of the primary advantages of porting is the retention of the cumulative bonus. Through porting, you can maintain the accrued benefits from your previous insurance company without any additional waiting period. It enables you to switch to a preferred insurer while preserving the rewards earned if you have not filed a claim within the designated period.
Waiting period: Any waiting period relating to pre-existing diseases, etc. that you have already served with your previous insurer needs to be credited to the new insurer during porting. For example, if your older health policy had a PED waiting period of three years and you have already served two years of that waiting period. In this case, when transitioning to a new insurer, you would only be required to complete the remaining one-year waiting period, provided that the new insurer extends a policy with a three-year waiting period as well.
Policy selection: When opting to switch policies, it is advisable to proceed only if the new insurance offers better coverage or benefits compared to the old one. It's essential to bear in mind that the transfer of existing health insurance coverage is limited to an equivalent policy. The policyholder cannot completely alter the coverage, plan, or type of the policy during the switch.
Insurer details: Before picking the right insurer to port your policy to, it might be a good idea to check a few metrics. When looking for an insurer, check a few metrics like claim settlement ratio, consumer complaints it has received, premium charged versus benefits offered, and different types of discounts being offered. It is also a good idea to check customer ratings on social media to gauge the overall customer experience.
Disclose medical history: When switching to a new insurer, it’s crucial to notify them about your current health conditions and undergo any required medical examinations. Failure to disclose any crucial health-related details could lead to potential claim rejections.
Porting fees: There is no requirement to pay any additional charges as a porting fee when transferring your policy. As per IRDAI regulations, no insurance provider can levy a processing fee to facilitate the policy transfer process.
Insurance portability allows policyholders to seamlessly transition between health insurance providers while retaining the benefits. To optimise this option, policyholders must carefully assess policy options and stay informed about renewal deadlines. By following the guidelines and understanding the process, a seamless transition can be achieved while retaining the original benefits.
Vivek Chaturvedi is Chief Marketing Officer and Head of Direct Sales at Digit General Insurance.