Health Insurance Portability

What is Portability in Health Insurance?

Portability in health insurance refers to the process of switching your existing health insurance policy to a new plan or health insurance company without losing the accrued benefits like No Claim Bonus (NCB), waiting period credit, free medical check-ups, etc. It provides the customers with the freedom to switch to a better health insurance provider in case they are unhappy with their existing policy or insurance company.

Every policyholder has the right to portability provided the previous health insurance policy was renewed without any breaks. In order to avail this facility, the policyholder has to apply to the insurance company, where he/she wishes to port his/her health policy, at least 45 days before the premium renewal date of the existing policy. If the policyholder fails to do so, it is up to the insurer to consider the application for portability.

Common Reasons Behind Health Insurance Portability

Take a look at some of the common reasons why a policyholder may opt for health insurance portability:

• Poor service quality
• Inadequate cover for specific health issues
• Slow and cumbersome claim settlement
• Late reimbursements
• Hiked premium, in case a claim is made
• Hidden clauses and conditions leading tolack of transparency
• Unacceptable co-payment clauses
• Room rent limits
• Better deals from another health insurance provider
• Desire to move to a specialised health insurance company offering personalised services in sync with a person’s needs

Health Insurance Portability Rules

The IRDAI has laid down certain rules for health insurance portability to be followed by both policyholders and insurance companies. Let’s take a look at the various health insurance portability rules below:

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 is continued without any breaks.

What is the Benefit of Porting a Health Insurance Plan?

Porting a health insurance plan comes with the following benefits:

• Protection of Continuity Benefits

  One of the biggest advantages of porting a health insurance policy is that it lets the policyholder enjoy the continuity benefits of the existing policy. This means that the policyholder does not lose the accumulated benefits on changing their health insurance policy or insurer.

  For instance, if the policyholder has an accumulated NCB of 30% under the existing policy, the same will be available if he/she decides to port the policy to another insurance company.

• Carry Forward of Waiting Period Credit

  Another important benefit is that the waiting period covered under the existing health policy will be carried forward to the new policy after portability. For example, suppose joint replacement surgery was not included in the coverage for the first 2 policy tenures under the previous policy.

  But as per the new policy offered by the new insurance provider, the waiting period for this surgery is 3 years. In this case, 2 years of waiting period credit from the previous policy will be deducted and the applicable waiting period shall be of 1 year only.

• Lower Premium

  Health insurance portability can also help the policyholder to switch to a health plan available for a lower premium. This is especially helpful for people whose premiums end up increasing after they raise a claim under their existing policy. But with the portability feature, they can port to a policy that offers the same level of coverage for a more affordable premium.

• Better Services

  A policyholder can also port to a new health insurance company if the services offered by the existing insurer were not satisfactory. For example, if the existing insurance company has a complicated claim process or has poor customer service, the policyholder can port the policy to another insurer with an easier claim process and better customer care team.

Process for Health Insurance Portability

Take a look at the process of porting a health insurance policy below:

• Apply for a portability request to the new insurance company at least 45 days before the existing policy is due for renewal
• On receiving the portability request, the new insurer will provide a proposal & a portability form and give details of the various available health insurance
• Select a suitable health plan and submit the duly filled proposal and portability forms to the new insurer
• After the new insurance company has received the forms with the details, they will approach the previous insurer or log on to the IRDAI’s website to check certain details like the applicant’s claim history, medical records, etc.
• The existing insurer will furnish all requisite details through the IRDAI’s common data-sharing portal within 7 working days. In case of any delay in sharing this information, the new insurer can hold the decision of porting request acceptance.
• Once the new insurer has received all the information, they will decide on accepting or rejecting the policy within 15 days. If the decision is not taken within this period, they will have to accept the portability application.

List of Required Documents for Portability of a Health Insurance Policy

Given below are the list of documents required for health insurance portability:

From Previous Insurer:

• Previous years policy certificates
• Latest renewal notice with a clear mention of coverage continuity, etc.
• Self-declaration by policyholders in no-claim cases
• Documents like discharge summary, investigation report, etc. if any claims have been filed

From New Insurer:

• Filled proposal form
• Filled portability form

Rejection of Health Insurance Portability Requests

While the IRDAI has empowered all policyholders with the right of portability, it has also given health insurance companies the right to reject any portability requests. As a result, all requests for portability are treated as new and are subject to scrutiny by the underwriter.

When a health insurance company receives a portability request, the underwriter assesses the risk exposure in order to determine the premium that needs to be charged. The insurer can reject the proposal if it is deemed unfavourable. In that case, the policyholder will have no other option but to continue with the existing insurance provider.

Reasons for Rejection of Health Insurance Portability Requests

IRDAI has given insurance companies the authority to reject a portability application if it is not in line with the company’s terms, conditions, and policies. Further, portability applications may also be rejected on the grounds of:

• Inadequate information
• Delayin document submission
• Poor claim history e.if multiple health claims have been made recently
• Major differences between inclusions, exclusions and other features ofthe current policy and new policy
• Non-availability of previous policy documents
• Break-in policy renewal

Other Important Grounds for the Rejection of Health Insurance Portability Request:

• Higher Age: In most cases, insurance companies avoid accepting portability requests from senior citizens. This is because the likelihood of falling ill increases as age progresses. While some insurance companies accept people in the age group of 60-69 years, most companies do not consider portability requests from customers who are 70+ years. Either way, in case of a portability request for senior citizens, insurance companies may act fussy, apply stringent underwriting rules, charge high premiums, ensure high premium loading, and may apply a co-payment clause.
• Unfavourable Health History: If a person has a pre-existing disease that the new insurer does not cover, his/her portability application could be rejected. Even minor illnesses, which could turn life-threatening later, lower the chances of a portability request being accepted. This is because pre-existing diseases and other chronic ailments require ongoing treatment, regular medication leading to high recurrent costs, which translates to multiple claims. For instance, a history of hypertension, diabetes, cancer, and other major illnesses in the applicant’s medical reports will lead to the application being categorised as ‘high risk’ and can lead to outright rejection.
• Porting Out of a Floater Cover: If a policyholder tries to port out of a floater health cover, the insurance company may get doubtful. This is because such requests usually come from individuals who have an adverse health condition and hence, wish to enhance their cover. Therefore, such portability requests are likely to get rejected.

Things to Consider Before Porting a Health Insurance Policy

Here are some of the things that a person should consider before applying for health insurance portability:

• Cautiously analyze the coverage & benefits of the new health insurance plan and compare features like waiting periods, exclusions or co-payments etc. with the existing plan before porting.  
• Make sure to look at the Incurred Claims Ratio (ICR) of the preferred health insurance provider before porting to the As per insurance experts, an ideal ICR should be between 70% to 90%.
• Some insurance providers might offer to port to a health plan after adding some conditions. Remember to cross-check the policy terms and conditions for any imposed waiting period, or permanent exclusion beforehand so that there is no hassle at the time of filing the claim.
• Start looking for new health plans at least 3 months before the existing policy due date so that the policy holder can research well and port to the best plan.
• If the existing health policy is ridiculously overpriced or the insurer has a poor claim settlement ratio or has imposed a wide range of inhibitory clauses, then porting the policy is better than holding on to the accumulated no claim bonus.
• The underwriting norms, terms and conditions, and the reasons for portability rejection may vary from insurance company to company.

Porting from Group Health Insurance or Family Floater to an Individual Health Cover

People covered under group health insurance policies or family floater policies may port to an individual health cover. However, to switch to another insurer, they first need to switch to an individual health plan offered by their current insurer. Switching to a new insurer of the policyholder’s choice is permitted only after one year.

Before making the final switch, it is recommended to go through the features, coverage and benefits offered by the new policy. Also, understand the differences between the two policies in terms of sum insured slabs, premium, entry age restrictions, renewal limit, sub-limits, capping, waiting period, co-payment, hospital network, etc.

Pros and Cons of Health Insurance Portability

The following table shows the pros and cons of porting a health insurance policy. Take a look:

Health Insurance Portability FAQs