Health Insurance Portability

5 min read

There are many aspects of health insurance which people are not aware of. Health Insurance Portability is one such aspect that many people might not be familiar with. Health Insurance Portability is the facility that allows an insurance holder to transfer the current health policies to a new insurance company without losing the benefits accrued during the period of successive renewals. Thus, it allows an insurance holder to easily migrate his/her policy from one company to another at the time of renewal of policy.

Let’s evaluate the various features and benefits of Health Insurance Portability, starting with its meaning.

What do you mean by portability in Health Insurance?

Portability in health insurance is the right given to a policy owner to shift or switch the existing policy to another insurance provider without losing the benefits accumulated in the current policy. The various benefits that are accrued in a policy, such as No Claim Bonus (NCB), free medical check-ups, credit of waiting period etc., can be transferred from the existing policy to the new policy provider with the help of Portability in medical insurance.

Thus, Health Insurance Portability allows policy owners to migrate his/her policy to a better company if the person is not happy with the existing provider. However, to enjoy Health Insurance Portability, it is important to renew your policy every year without a break. If you have missed renewing your medical insurance in the past, you cannot enjoy the portability feature. Also, to port to another insurance company, you have to apply 45 days prior to the renewal date of your current policy.

Common reasons of Portability

  • If the insured is not happy with the quality of the insurer.
  • If the cover offered for a particular health condition is insufficient.
  • If the process of claim settlement is slow and complex.
  • If you are receiving your reimbursements late.
  • If the insurer hikes the premium rate
  • If there is lack of transparency in terms of hidden charges levied on you.
  • If there are complex clauses of co-payment.
  • If you receive a good deal from another insurance provider.

Rules of Health Insurance Portability and Accountability Act

There are many rules entrusted by IRDAI regarding the portability in insurance. These rules are expected to be followed by both policyholders and the insurance providers.

Below are the different rules laid down by IRDAI:

Category – Type of policies allowed to port under health insurance portability.

Rule – Only the same type of health policies are permitted to port in case of both family and individual policies.

Category – Company type allowed to port.

Rule – Can port from one general or specialized company to other general or specialized company.

Category – Time required to port a policy.

Rule – Portability is allowed just before the renewal time of the current policy and not during any other period.

Category – Renewal of existing policy

Rule – For using the benefit of portability, the insured person must renew the policy continuously without any break. If you have not renewed the policy in the past, you cannot claim the feature.

Category – Intimidation about Portability

Rule – Insured person must notify their insurance provider in writing with a 45 days’ notice period prior to the renewal date of your policy.

Category – Acknowledgment

Rule – Your insurance company is expected to accept and acknowledge the application within 3 working days

Category – Charges

Rule – No porting charge is levied on the insured

Category – Premiums

Rule – Premium might change even for similar policies. Elderly people might have to pay more after porting to new company.

Category – Grace period

Rule – 30-days grace period for renewal is allowed to the insured person in case they are willing to port and waiting for the new company’s approval.

Category – Sum Insured

Rule – It is the discretion of the policy owner if they want to increase the amount insured. But sum insured should be equal to the original amount insured in the previous policy.

Category – Waiting period for existing diseases

Rule – If the new policy has more waiting period as compared to the earlier policy, then the insured person has to complete the additional period of waiting. So, if you have served 3 years of waiting period in the old policy and the new policy has 4 years of waiting period, then you have to serve one year of the waiting period before you could enjoy the benefits of the new policy.

Health Insurance Portability benefits

  • You can safeguard your continuity reimbursements by using Health Insurance Portability.
  • You can continue or preserve your credit for the waiting period.
  • You can switch to a policy provider offering lower premium.
  • You can port to an insurance company offering better services.

Health Insurance Portability Process

  • You must apply 45 days prior to the due date of the existing policy renewal.
  • You will receive a portability form from the new insurer once your portability request is received.
  • The form will have details of different health policies.
  • Choose the best one suiting your needs. Now fill the form accordingly and submit it to the new insurance provider.
  • Once the form reaches the new company, they will approach your existing policy provider or go to the IRDAI portal to check various details.
  • The new insurance company will take 7 work days to furnish and proceed with the details.
  • Finally, the new insurance company will decide within 15 days whether to accept or reject your application.

Documents required for Health Insurance Portability  

 From the old insurance company:

  • Policy certificates of the past year
  • Renewal notice with details of coverage continuity
  • Policy owner self-declaration on no-claim
  • Important documents like investigation report, summery of discharge, etc.

From the new insurance company:

  • Proposal form with details
  • Portability form with details

Reasons for rejection of Health Insurance Portability  

At times the portability application might get rejected. Here are the reasons for the same:

  • Insufficient information
  • Delay in submitting the details
  • Poor history of claims
  • Non-availability of details of the previous documents
  • Higher age factor
  • Gap in policy renewal
  • Adverse history of health

Conclusion

Health Insurance Portability is a good way to transfer the current health policies to a new insurance company without losing the accrued benefits. However, it is important to cautiously tread and compare different portability features of different companies before porting to a new health insurance provider. If you are planning to port to another medical insurance provider, start looking for the same at least 2-3 months before the renewal date. Overall, the Health Insurance Portability is an excellent opportunity for insurance owners to claim benefits and to switch to a new provider.

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Gayatri Prabhu, Head-Digital Business at Mahindra Insurance Brokers Limited (MIBL) is one those few digital leaders who has the width and depth that is required to execute an ROI driven holistic digital strategy. She cuts through the noise, identifies the critical levers and leads her team to successful execution of the defined strategy. Her core mantra to win new and retain existing customers is: understand the consumer behavior and craft experiences around it.

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