Health insurance is an important investment that needs to be done at the earliest and cannot be missed, especially in today’s age where medical costs are constantly rising. However, with the increasing awareness of health insurance today, there are many dynamic health insurance products available that may be better than what you already have. So can you shift to a new plan without losing the benefit that you already have? Discussed here is the meaning and need for health insurance portability and related details of the same.
What is health insurance portability and why is it needed?
The meaning of health insurance portability is the ability of an individual to switch their health insurance policy from one insurer to another, without losing the benefits of their existing policy. This benefit was introduced by the Insurance Regulatory and Development Authority of India (IRDAI) to provide higher flexibility and choice to policyholders and ensure they can get maximum benefits from the latest plans at their disposal.
The primary need for health insurance portability is to provide the policyholders the option to choose between upgraded plans that meet the changing healthcare needs and budget. This eliminates the dependency on a single insurer for a lifetime at the same time encourages healthy competition among the insurers to provide the most optimum health insurance to the public. Health insurance portability allows policyholders from losing their accumulated benefits like no-claims bonus, waiting period, and coverage for pre-existing conditions when they switch insurers. Therefore, individuals do not have to start from scratch with a new insurer and also receive continued benefits from health insurance.
What are the factors to be considered while opting for health insurance portability?
There are several factors that should be considered while opting for health insurance. Some of these factors are highlighted hereunder.
1. Claim settlement ratio
One of the top factors when choosing a health insurance provider is their claim settlement ratio. It is the ratio of the total number of claims settled by an insurance company to the total number of claims received by the insurer in a particular period. The insurer with the highest claim settlement ratio is ideally preferred by policyholders and therefore when there is a better plan available they have the benefit of porting to such a new plan from their existing one.
2. Customer service
The reputation of the insurer is an important factor to be considered in buying insurance. A major contributor to a healthy reputation of an insurer is customer service. Therefore an insurer having robust customer service should always be preferred to have a hassle-free experience.
3. Waiting period
The waiting period is the time period or the cooling off period as per the insurer guidelines during which the claim or the coverage under the policy is not effective this waiting period can be for any treatment, any illness, or claiming the benefit for any pre-specified condition. Health insurance portability can be considered in case of a longer waiting period.
Comparing the coverage under the existing insurance policy is one of the top considerations for portability to a new insurer. Therefore, a policy providing better coverage should be opted for by the policyholders to ensure that they meet all their requirements and expectations.
5. Premium to be paid
Premium is the cost of insurance and the premium providing better coverage at a minimum premium should be opted for by the policyholders. This can be a major consideration for policyholders to opt for health insurance portability.
6. Additional benefits
Many insurers provide additional benefits to the policyholders that can be in the form of better discounts in premium payments, top-up plans, loyalty points, upgrades for rooms, facilities for regular health check-ups, etc. Such additional benefits can be grounds for health insurance portability decisions.
What are the rules for health insurance portability?
Health insurance portability in India is governed by the IRDAI (Insurance Regulatory Development Authority of India). Some of the prime rules for health insurance portability are mentioned hereunder.
- Policyholders can opt for portability only during the renewal stage of their policy and not in between.
- Policyholders can port individual policies and family floater policies as per IRDAI guidelines.
- Portability is available only for policies that are issued by insurance companies that are registered with the IRDAI.
- The policyholder must apply for portability at least 45 days before the date of renewal of the policy.
- The new insurer has to acknowledge the request for portability within 3 days of receiving the application and give an answer for the same within 15 days of receiving all the documents.
- There are no charges to be paid by the policyholder for portability.
- Policyholders can ask for an increase in the coverage to their existing policy but the approval for the same will be at the discretion of the new insurer. The new insurer, however, has to provide similar or the same terms as compared to the existing policy so the policyholder does not lose out on any benefits.
- The policyholder should disclose all the relevant facts to the new insurer including details of pre-existing conditions and any claims made under the existing policy.
- The new insurer is bound to provide an adequate explanation to the policyholder in case of rejecting the portability application.
- Applicants are eligible for a grace period of 30 days in case the porting application is under process and during this period, they are required to pay the premium on a pro-rata basis.
- The waiting period as per the previous policy will have to adhere and therefore, the policyholder will have to wait for the balance period accordingly, if any. If the waiting period is exhausted, they will get coverage for pre-existing ailments and diseases immediately without any additional waiting period.
Health insurance is an important addition to any portfolio and needs to be taken care of at the earliest. With the option for health insurance portability policyholders can take maximum advantage and get the most optimum coverage for themselves and their families. Health insurance portability is subject to the rules of the IRDAI and there may be a few cases of loss of benefit like moving from a group insurance policy to a personal health insurance policy, etc. Therefore, it is important to be aware of all the facts and review the pros and cons before opting for the same.
Many insurers provide an online or an offline option to opt for health insurance portability where policyholders have to submit their duly filled application at least 45 days before it is up for renewal.
The possible reasons for health insurance portability are poor customer service, increased premiums, delays or hassles in claim settlement, lack of transparency, better and new health insurance policies from competitors, etc
The top advantages of health insurance portability include the continuity of the benefits and waiting period from the existing plan along with competitive premiums, etc.
Some of the major shortcomings of health insurance portability include the time frame permissible for portability which is only at the time of renewal, loss of existing benefits in certain cases, no guarantee of acceptance, additional premium as per the guidelines of the new insurer, etc