scorecardresearchInsurance portability: From benefits to requirements; All you need to know

Insurance portability: From benefits to requirements; All you need to know

Updated: 25 Jan 2023, 08:05 AM IST

Insurance portability allows policyholders to switch from one insurer to another without any hassles. However, the insurer may reject the request due to pre-existing conditions, cost of coverage, waiting period, or incorrect information.

Insurance portability enables policyholders to transfer their existing policy, along with all its benefits and features, to a new insurer.

Insurance portability enables policyholders to transfer their existing policy, along with all its benefits and features, to a new insurer.

Insurance portability in India is a concept that allows policyholders to switch from one insurer to another without any hassles. It was introduced by the Insurance Regulatory and Development Authority of India (IRDAI) with an aim to provide greater flexibility to policyholders.

Insurance portability enables policyholders to transfer their existing policy, along with all its benefits and features, to a new insurer. This means that the policyholder can enjoy the same benefits even after switching the insurance company. The process of porting an insurance policy is quite simple and hassle-free. Let us understand the process in detail.

How to port your insurance policy?

As the initial step, the policyholder needs to fill out an online form on the website of IRDAI. After the form is filled and submitted, the current insurer will be notified about the request. The current insurer is then required to provide the policyholder with all the information related to the policy. This includes details of the premiums paid, the term of the policy, the sum insured and other important information.

Once this information is provided, the policyholder can approach the desired insurer for porting the policy. The new insurer will then verify the details provided by the policyholder and the current insurer. If the details are found to be accurate, the new insurer will accept the proposal and issue the policy to the policyholder.

What are the required guidelines to port your insurance policy?

  1. If a person decides to switch health insurance providers, they must give written notice to the current insurance provider of their decision and name the new provider.
  2. Furthermore, they must send a portability request to the new insurance company at least 45 days before their current policy expires.
  3. Policyholders must regularly renew their health insurance plans in order for the portability option to be accessible. However, it won't be considered a break-in policy and porting will be allowed if the policy is terminated as a result of an insurance company delay.
  4. Applicants are granted a 30-day grace period for policy renewal if the porting procedure is still in progress or the decision from the new insurer is still pending.
  5. To receive this extended coverage, policyholders must pay a prorated payment to their present insurer instead of the yearly premium.
  6. A person must finish the whole waiting period, minus the time already spent under the previous policy, if they transfer to a new insurer with a lengthier waiting period for pre-existing conditions.

What are the benefits of porting your insurance policy?

Porting your insurance policy can have a number of benefits, depending on your individual circumstances. 

Firstly, porting provides policyholders with more flexibility and control over their insurance coverage. It allows them to move their policies to another insurer without having to go through the entire process of researching and selecting a new policy. This can save time and money, as well as help ensure that they get the coverage they need.

Secondly, it enables policyholders to maintain their existing policy terms and conditions. This means that they don’t have to worry about any changes in coverage or premiums when they move their policy. 

It also means that they can keep the same deductible and benefit levels, as well as the same exclusions and limits. This is especially beneficial for those who have built up loyalty over time with their current insurer.

Another advantage of porting is that it can provide policyholders with access to better deals. By moving their policy to a different insurer, they may be able to secure lower premiums and other discounts that weren’t available from their current provider. This could help to reduce the overall cost of their coverage.

Finally, porting can provide policyholders with peace of mind. Knowing that they can easily move their policy between different insurers gives them greater control over their insurance needs and can help them to feel more secure.

Speaking on the same, Ajay Shah, Director & Head - Retail of Care Health Insurance said, “The portability guideline by IRDAI enables policyholders to opt for their preferred insurer without worrying about losing their policy continuity benefits. Porting a health insurance plan can in fact have added benefits; you can upgrade to a product with better features & services from a different insurer, get attractive premiums & enhanced services, all this without losing out on continuity of waiting period for pre-existing conditions earned with the previous insurer.”

“Some insurers also give you an option to their other accrued benefits and bonuses after porting to their plans/products. To port a Health Insurance policy, one needs to apply at least 45 days prior to the premium renewal date,” he added.

Can insurance providers reject your portability request?

Pre-existing conditions

Most health insurers will not accept applications for portability if the applicant has a pre-existing condition. A pre-existing condition is any illness or medical condition that existed prior to the application for insurance. This includes anything from diabetes to cancer and even mental health issues. Many insurers view these conditions as too costly to cover.

Cost of coverage

In some cases, an insurer may decline portability simply because the cost of providing coverage is too high. This is especially true for individuals who are older or have complicated medical needs. Health insurance companies must calculate the cost of providing coverage for each individual and decide whether or not the expense is worth it. If the cost is too high, then the insurer may deny portability.

Waiting period

Insurers may require a waiting period before an individual can apply for portability. The waiting period can range from weeks to months, depending on the insurer. During this time, the insurer will review the individual’s medical records and other information to determine their risk level. If the risk is too high, the insurer may deny portability.

Incorrect information

When applying for portability, it is important to provide accurate and up-to-date information. Insurers may reject an application if they find incorrect or outdated information. This could include inaccurate information about the applicant’s medical history or current medications. Providing incorrect or outdated information can lead to a rejection of portability.

Insurance portability is a great way for policyholders to switch between different insurers and get better deals and coverage. However, it is important to understand the guidelines, benefits and potential rejections that may come with porting your policy. By following these guidelines, policyholders can make sure their application is successful and enjoy their desired insurance coverage.

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First Published: 25 Jan 2023, 08:05 AM IST