Are you thinking about the portability of your health insurance policy? If yes, then why are you going to port your insurance? You should know the answer before you switch your policy to another insurer.
Of course, you have the option to port your policy to another insurance company.
But you should know that what is going to be better after porting the policy. Health insurance is a very crucial decision in your life. You have purchased health insurance to secure yourself and your family. You should take the decision after careful analysis.
Are you getting any better product option in another company or you are not happy with your current insurance company? You should compare and review your current policy before making a final decision to port it.
You should have a clear picture in your mind that what is better in the next company. Might be you are not happy with the current company. But are you getting the solution to the next company?
Do the analysis of all the aspects of portability. Understand the pros and cons of porting your health insurance.
What is the Portability of Health Insurance?
The health insurance policyholder has the right to port his policy in another insurance company. Portability is the process by which you can switch your health insurance policy from one insurance company (General/Health) to another insurance company (General/Health).
You can do this without losing the continuity benefits of your policy. You also get the benefits of the waiting period which you already severed, no claim bonus which you had already gained in the policy.
Portability was introduced by IRDA in the year 2011. Portability is possible only on the renewal of the policy.
The next insurance company processes your proposal as a fresh case and does all the needful underwriting. The company has the right to reject or accept the portability of your health insurance policy. So, you should not assume that company can not reject the case.
When You Should Port Your Health Insurance Policy?
You can port your policy easily. But does it suites you? What are the reasons behind switching from the current insurer to another insurer? In my opinion, there may be two important reasons.
1)- You are not happy with your insurance company.
2). You are getting something better option and you will be happier with the next insurer.
There may be many reasons for these two options. Like… You are not happy because of the slow claim process or poor service etc.
Or You are going to get happier because the next company is giving a better plan or better service etc. There may be many points. So let’s understand one by one. There may be some of the following situations when you should think about the portability of your health insurance policy.
1- Poor Service
When we buy any kind of insurance, we want the best service. But sometimes it becomes the worst thing when we don’t get the expected satisfaction from the services.
If your insurer is not responding well and not giving proper service in the time of need then you may think to port the policy.
2- Facing Problems in Claim Process
Poor claim settlement process may the most important aspect. You may think to port your policy if…
A). You are facing problem every time when you file any claim.
B). Company does not have cashless claim process.
C). Insurer takes lots of time to process the claim.
D). Your insurance company aks the same documents again and again and does unnecessary delay in claim settlement.
If you are facing challenges in the claim process then it’s not good. Try to understand the situations and analyze your role also. Why claim problem? It was only company mistakes and harassed you. Or there was a mistake from your side.
If you find that you are facing problems in claims because of the insurance company only and there is no fault from you then You should think to port.
3- Better Product Option from another Insurer
This may be one of the reasons to think to port your health insurance policy. If You are getting more benefits from another insurance company at a reasonable premium then switching may be a good option.
For example, currently, you are getting free health checkups once in two years. However, the next insurer offers you free health checkups every year.
Second Example, You sum assured is not satisfactory and your company is not ready to increase the sum assured. However, you have the option to increase the sum assured in the next insurance company.
There may be any others benefits also which you may have with new insurer.
4- Higher Sub-limits and Copay
Mr. Abhi Purchase a health insurance policy. After 8 months he got hospitalized due to sudden disease. His total bill was 5 lac but the company paid the claim of Rs. 4 lac. Company deducted Rs. 1 lac (20%) as Co-pay. Mr. Abhi paid Rs. 1 lacs from his pocket.
Now in this case, if Mr. Abhi is getting a plan which has no-copay then he may think for portability.
There may be capping on the emergency ambulance, room rent, and other features and benefits in your current policy. If you are getting a better plan and without sub-limit from another company then you may prefer to switch.
However, you should also consider other plus and minus factors before you port your policy.
5- Hidden Terms and Conditions
Lack of transparency may be another reason for your disappointment. You should think to switch your insurer…
If your current insurer is not transparent and doesn’t provide you clear communication.
If your insurer has very complected & confusing terms and doesn’t suites you.
You must understand your policy terms and conditions.
What is the Process of Portability?
You can apply for portability at the time of the renewal of your health insurance policy. You need to submit a filled proposal form with the required documents to the new insurer before 45 days of the expiry of the policy.
Normally following documents required:-
1- Filled Proposal form
2- Previous policy copy and renewal notice
3- KYC Documents
4- Medical history, Investigation reports and discharge summary if any
This is general overview only. Documentation list may vary.
The insurance company will process your request and will do the required underwriting. According to the medical history/symptoms and age, the company may ask to go through a pre-policy medical test also.
The company also approach to your existing insurer to verify your policy details and claim history.
After complete, satisfactory underwriting, the company will issue the health insurance policy. Company may also reject your proposal if your proposal is not satisfactory.
Why Insurance Company May Rejects Portability of Your Health Insurance?
When you apply for portability, company check proposal, all the facts and documents. After underwriting and medical test (if any required), the company accept your proposal or reject it.
Your proposal may be rejected on the basis of many grounds. It may be a medical history, pre-existing disease, any new element, health status, etc. Here are some reasons which may be the reasons for the rejections of the proposal.
1- Delay in Submission of Application
If you are planning to port your insurance policy then apply it within the time frame. Every company needs some time to underwrite the case. There may be a pre-policy medical test also.
The insurer may reject your proposal, if you will not submit it on time or incomplete. Be proactive and submit proposals and required documents timely.
2- Medical History and Pre-Existing Disease
Mr. Gaurav purchased a health insurance policy 2 years ago. When he purchased this policy he was healthy and fit. But from the last six months, he is suffering from a kidney disease and has a BP problem also.
His policy renewal was due. He applied for the portability of his policy in the last month. But the insurance company rejects his proposal because of the existing disease.
This is just an example to get you to understand. Actual situations and risk exposure may vary from case to case. I just want to explain to you only that the next insurer may decline your case on the basis of an existing disease or on the basis of risk exposure).
3- Incorrect Information
Company may decline your proposal if you provide any incomplete and inaccurate information. Correct information is very important to process your proposal. You must provide all the details with honesty.
Example:- Mr. Guurav applied for the portability of his health insurance policy. He mentioned that he didn’t make any claim from his existing insurer and he is completely fit.
New Insurer started to process his proposal and verified his claim status from his existing company. The company found that he had taken two claims from his existing insurer in the last policy period.
In this case, the company declines the proposal because he was not honest and he provided wrong claim history.
Every single information may be a very important one. You should be sure that you have given all the details with honesty and complete.
4- Rejection in Pre-Policy Medical Test
Every insurer does its own underwriting for every proposal. Either you apply for fresh policy or portability, the insurance company follows the underwriting process.
In some cases, insurers recommend for pre-policy medical tests also before issuance of the policy. It may be on the basis of age and or any pre-existing disease/symptoms etc.
If your medical diagnosis report and health status are not satisfactory to the insurer then your proposal may be declined.
5- Suspicious and Fraud
Insurer may decline your proposal if there is any fraud and suspicious elements. For example, If you temper your previous policy document to change any details and submit it to process portability of your health insurance then the company may decline the case.
Your proposal may also be declined if there is a huge increase in sum assured at the time of portability. For example, you have a health insurance policy of the sum assured of Rs. 3 lac. But suddenly you want sum assured of Rs.75 lac or Rs.1Crore.
In this case company may doubt and can ask some more supporting documents and or details.
6- No Previous policy documents
Insurer may also decline your portability proposal in the absence of a previous policy document. Almost every insurer asks you to submit your previous policy documents with the proposal form.
Normally, you asked to provide previous policy documents for up to four years. It depends on maximum waiting periods in your new plan and how many years you have served in the existing company.
What Are the Benefits of the Portability of Health Insurance Policy?
There are more than 30 General/Health insurance companies in India. More than 100 health insurance product options are available. Competition in the insurance industry is high. Every companies try to offer a better and innovative product to customers.
I mean you have a lot of product options to choose from. Portability is an option where you transfer your health insurance policy from the current insurer to another insurer. If You take the right decision then you may have some advantages.
Here are some of the following advantages which you can get from portability of policy:-
1- Increase Sum Assured
You may have the option to increase your current sum assured. If your current sum assured is very low and not sufficient for your family then you may increase your some assured.
Yes, you can do it with the current insurer also. But if your current company not ready to increase the sum assured then portability may be a good option for you.
2- Low Premium
If you are paying a very high premium for your policy then portability may be the option to reduce your premium. For Example, Mr. Ashish has a health insurance policy and paying a premium of Rs. 25000/-. He port his policy at the premium of Rs. 18000/-. He saved Rs. 7000/-.
But before porting his policy, Mr. Ashish took a wise decision and analyze his existing policy and new product very carefully. He understood the pros and cons. Mr. Ashish was not compromising on features and Services.
He was getting better benefits and services if he port. That’s why he took the decision to go with another insurance company and port it.
3- More Features and Benefits
This may the most important reasons to switch insurance policy. Possible, you do not have sufficient benefits/coverage in your health insurance policy.
For Example, your policy doesn’t have restoration of sum assured benefit but you may get restoration benefit in another insurance company.
You have some capping on some elements like on room rent, emergency ambulance, and some procedure but you may get better options in the next insurer.
Portability may be a good option if you are switching to a better features and benefits.
4- Better Claim Process & Service
Unnecessary delay or claim rejection may disappoint you some time. You may port your policy if you are not satisfied with the claim services of the current insurer. If another company is giving better claim service, then its a better option.
Network hospitals and in-house claim settlements are also the factors for better claim settlement.
What Are the Disadvantages of Portability of Health Insurance Policy?
It is not true that portability is always a beneficial option and you don’t lose anything. If you are doing it without any proper planning and workout then it may not be as good as you think.
Sometime you may lose some benefits or you may need to pay a high premium in comparison to the current insurer. You may have some of the following disadvantages:-
1- High Premium
Sometime portability may be costly to you and may need to pay a high premium in comparison to current premium. Let’s understand with an example…
Mr. Arvind purchased a health insurance policy 4 years back. He was physically fit and his health status was good. He was paying his normal premium in his current company.
But 1 year ago he become diabetic and also BP problem. At the time of renewal of his policy, he applied for portability.
The next insurer was taking an extra premium because of diabetes and BP problem. Your premium may also vary according to plan. It will depend on features and sum assured also.
2- You May Loose Some Features & Benefits
In portability, you get the benefits of the waiting period, continuity, no claim bonus, etc. But all the features does not transfer to the new company.
Your next insurer provides you his own product and its benefits. Of course, you get the benefits that you have gained in the previous policy. But you may lose some features and benefits when you switch the company.
Example:- You have air ambulance benefits in your current health insurance policy. Maybe, you do not have this benefit after porting your policy to another insurance company. Possible, Your next insurer doesn’t provide you air ambulance in the particular plan in which you are porting.
3- You May Lose Long Relationship
If you are running your health insurance policy for 5 years or 10 years or more with the same company. Means its very long association with any company. You do not have any serious issues and service is also good. Here, portability might not be a good option.
You should not compromise your long and healthy relationship for only a matter of small difference in premium only. You may lose your long relationship after porting the policy.
Conditions of Portability
Here are the some basic things you should know for portability of health insurance policy:-
1- You can port your policy to a similar product only. You can switch the indemnity policy to indemnity policy only.
2- It is allowed at the time of renewal only.
3- You can apply for it before 45 days of the renewal date of the policy. However, some companies also accept the proposal after 45 days also.
4- You can port your health insurance policy from a general/health insurance company to a general/health insurance company.