Health Insurance Portability

Health Insurance Portability: Key Highlights

Why Should You Port Your Health Insurance Policy?

If you feel your existing health insurance plan is unable to cover your medical needs adequately or if your current insurer delays claim settlement, the Insurance Regulatory and Development Authority of India (IRDAI) provides you the freedom to switch to a better health insurance provider.

The IRDAI states that if a policyholder is unhappy or dissatisfied with their existing policy’s coverage or services provided by their current insurer, there is no need for them to unwillingly remain locked into that policy. They can choose to place a portability request to switch their health insurer and buy a better plan.

Here are the scenarios when you may want to port your policy:

What are the Benefits of Porting a Health Insurance Policy?

Now, let us look at the benefits of health insurance portability:

1. Better Coverage

   You can switch to a health insurance policy with higher coverage and better features that are more suited to your healthcare needs.

2. Protection of No Claim Bonus

   You do not lose the accumulated no claim bonus (NCB) on porting the existing health insurance policy to another insurance company.

3. Carry Forward of Waiting Period Credit

   The waiting period served under the existing health policy will be carried forward to the new policy after portability.

4. Better Value for Money

   You can find a plan with similar benefits at a lower premium. Hence, with health insurance portability, you can get better value for the premium paid.

5. Better Service Experience

   If you are dissatisfied with the current insurer’s claim settlement process or customer support, you can switch to an insurer that provides better services and customer experience.

6. Improved Policy Features

   You can opt for better policy benefits, such as unlimited restoration of sum insured, no room rent limit, maternity benefit, annual health check-ups, option to reduce waiting periods, etc.

How to Port a Health Insurance Policy Online?

Understanding how health insurance portability works lets you smoothly transfer your medical insurance to another insurer. Here are the steps to port your health insurance:

Step 1: Initiate the Porting Process

Raise a portability request with the health insurance company you want to switch to at least 45 days before your current policy expires.

Step 2: Evaluate Plans & Submit Documents

Compare different plans and select the one you wish to port to. Fill out the online portability form and the proposal of the new insurer. Give accurate details about your existing health insurance policy.

Step 3: Application Assessment

The new insurer will assess your portability application based on the given information. They may approach your previous insurer to get details like your claim history, medical records, etc.

Step 4: Portability Decision

Upon receiving all the information, the new insurer will accept or reject your portability request within 15 days.,

If the decision is not made within this period, the new insurer will have to accept your portability application.

Step 5: Seamless Policy Transfer to the New Insurer

You are issued the new health insurance policy, and the accumulated benefits of your existing health policy are transferred to the new one.

Who Can Port Health Insurance Policy?

Any policyholder with individual or family health insurance can port from their current insurance company to a new insurer. A person with a group health insurance plan can port to an individual health plan.

Take a look at the important portability eligibility criteria:

• Policy Renewal: You can port your health insurance plan only at the time of policy renewal.
• Application Timeline: You must submit a portability request with the preferred new insurer at least 45 days before the current policy expires.
• Continuous Coverage: Your existing policy must have been renewed continuously without any break. A lapsed health insurance policy cannot be ported.
• Minimum Tenure: You can port health insurance only if you have held the policy with your existing insurer for at least 1 year.
• Similar Coverage: You can port only to a similar type of policy, i.e., a family floater policy can be ported to another floater plan only.

What are the Documents Required for Porting a Health Insurance Policy?

Now that you know how to apply for health insurance portability online, you must also know which documents to keep handy. Here is the list of documents required for health insurance portability:

• Identity proof
• Address proof
• Policy documents of the current health insurance policy
• Documents supporting claim history
• Portability form
• Proposal form

What is Transferred to the New Policy When You Port?

The following benefits earned by you under your existing health insurance plan are carried forward to the new policy from another insurer.

1. No Claim Bonus

   The amount you have accrued as a cumulative bonus under your existing policy is transferred to the new health policy.

   For instance, if you have accumulated an NCB of 30% under your existing health insurance for parents, the same will be transferred to the new policy after portability.

2. Waiting Period

   The time for which you have already waited out in your existing policy is reduced from your new policy so that you do not have to repeat it.

   Suppose your current policy had a waiting period of 2 years for joint replacement surgery, and you have served the entire waiting period.

   Now, you want to port your health insurance. The new policy you have selected covers the same surgery after 3 years.

   Since you have already served a 2-year waiting period for this surgery, you now have to serve only 1 year of additional waiting period rather than the entire 3 years again.

3. Sum Insured

   According to the IRDAI portability guidelines, the new insurer is required to offer you a minimum coverage amount equal to your current health insurance policy. You also have the option to choose a higher sum insured.

Here is a brief summary of what's transferred and what's not transferred when you port:

Health Insurance Portability Rules by IRDAI

After knowing how to port a health insurance policy, let us look at the portability rules laid by the IRDAI. These IRDAI rules for health insurance portability must be followed by both policyholders and insurance companies.

As per the IRDAI's guidelines, health insurance companies must accept portability requests at policy renewal or the end of the specified exit age by offering suitable credits for all previous policy years, provided the policy has been renewed without any breaks.

Here are the health insurance portability rules in India:

When Can Your Portability Request Get Rejected?

While portability is a policyholder’s right, the IRDAI regulations also allow health insurance companies to reject health insurance portability requests Hence, all new portability requests are subjected to scrutiny by the underwriter. If the applicant's profile is deemed unfavorable, the insurer may reject the applicant's portability application.

Here are the 11 most common reasons why portability requests get rejected:

It is to be noted that the underwriting norms, terms & conditions and the reasons for portability rejection may vary from one insurance company to another. Having an in-depth understanding of what is health insurance portability helps you to not only simplify the process, but also stay prepared for why your portability request can get rejected.

Portability in Family Floater Health Insurance Plans

When porting a family health insurance policy, members covered under the existing plan move together to the new policy. However, you have the option to add or remove eligible family members during portability.

When adding a new member to the family floater plan during portability

• New members are treated as new entrants.
• They must serve the waiting periods that may apply to them.
• The new member must make health disclosures or can be asked to take medical tests.
• The continuity benefits of previously covered members, such as accrued bonuses, do not apply to the new members.

When removing a member from the family floater plan during portability

You can exclude a member from family health insurance due to many reasons, such as divorce from the partner or a change in the financial dependency status of an adult child.

The removed member must apply for an individual portability plan if they wish to carry forward their accrued bonus and waiting period credits. If they exit the current plan without moving to a new plan, they shall lose all their earned benefits.

Can you Split a Family Health Insurance Policy into Individual Policies During Portability?

You cannot directly split a family health insurance plan into individual policies during portability. This is because of the IRDAI guidelines which let you port only similar policy types.

If you want to split a floater plan into individual policies with a new insurer, you must first change the policy type (from family floater to individual) with your current insurer at the policy renewal.

Once the policy is split into individual plans, you can port these new individual policies to a new insurer, with your accrued benefits being carried forward to the new plan.

Health Insurance Portability: Myth vs Facts

Here are some of the common myths about portability that you must not pay attention to:

Things to Consider Before Porting a Health Insurance Policy

Here are the important things to consider before applying for health insurance portability:

• Coverage Benefits- Evaluate the coverage & benefits of the new plan and compare features restoration benefits, NCB, annual health check-ups, consumables cover, treatment-specific sub-limits, waiting periods, co-payments, etc., with the existing plan before porting.
• Financial Stability - Make sure to check the Incurred Claims Ratio (ICR) and the Claims Settlement Ratio (CSR) of the preferred health insurance provider before porting.
• Waiting Periods & Exclusions - Remember to cross-check the terms and conditions of the new policy beforehand, especially for any imposed waiting periods or permanent exclusions, to avoid any surprises at the time of claim.
• Renewal Timeline - The portability request has to be submitted at least 45 days before the current plan's expiry. Start looking for new health plans at least 3 months before the due date so that you have enough time to find the right one.
• Network Hospitals - Check the new insurer's empanelled network of hospitals to ensure a smoother claim process. Ensure a nearby, reputed hospital is in the network list.

Who Should Not Port Health Insurance Policy?

Here is when porting your policy may not be a good idea and you should avoid it:

• You have high claim history: Frequent, high-value claims may increase the chances of application rejection.
• You are nearing the end of a waiting period: If you have almost completed your waiting period timeline, it is better to wait to port. While the waiting period credits are transferred to the new policy, the new insurer would underwrite your profile and can levy additional loading or conditions.
• If you are switching only for a lower premium: It may result in you getting a plan with lower benefits or higher limitations, compromising your coverage.
• You have a lapsed policy: If you have unpaid premiums, consistent late renewals or a break in your policy, your request to port can be rejected.
• You are satisfied with your insurer: It may provide little or no additional value to port if your existing policy offers adequate coverage, smooth and easy claim settlement, a large network of cashless hospitals and valuable benefits.
• You have not done policy comparison: If you have not compared multiple plans before porting, you may lose on unique benefits and strong features your existing plan is offering.
• Senior citizens with pre-existing conditions: Older people, especially with chronic or serious medical conditions, are deemed unfavorable profiles and have a higher chance of facing rejection from the insurer.

Is Health Insurance Portability Right for You?

There are both pros and cons of health insurance portability. Hence, you must port your policy only if it is actually required.

Here is when you can port your policy and when you should avoid porting: