What is health Insurance portability? On similar lines with the car insurance policy, which comes with a wonderful feature of switching the insurer along with the benefit of No Claim Bonus, Health insurance also comes with the feature of changing the insurer at the time of renewing the policy.
When should you port health insurance policy? A person should port the plan if the plan is very expensive or if there are hidden issues like Hospital room cost etc.
What can be ported to health insurance policy? Usually, a person can port the similar policies. Just the health care policy should have a floater option. Group healthcare policies can be ported only after it is converted to an individual policy. Portability helps to port the policy insurer while ensuring the benefits of the original policy
Like the time-bound exclusions (waiting time), No Claim Bonus etc.
Health insurance policies come with three types of waiting periods. The first one is a 30 days waiting period which includes no claims for a period of 30 days for the ailments except the hospitalization cost. The second includes the waiting period for pre-existing ailments and this time period could extend for a time period of 4 years and the third is the waiting period for certain specific ailments as per the policy. In this case, suppose a policy has a waiting period of 2 years for a particular ailment. In the 1st scenario, if you are porting before 2 years then the remaining time of the policy would continue with same features under the new policy and in the 2nd scenario if the 2 years have passed then in the new policy the restriction will not be there.
Similarly for the No Claim Bonus – In case you have a policy of 3 lakhs, and under the current insurer the No Claim Bonus makes it a 3.2 Lakh policy, In this 1st scenario, if you port the policy you will get the benefits on the entire amount incl. of NCB and the insurers will not charge for 3.2 lakhs. In the 2nd scenario, if you have a policy of 3 lakhs under current insurer and you change to an insurance plan of 5 lakhs, then the benefits of the current insurance will be provided up till a cap of 3 lakhs and to the rest over amount of 2 lakhs facilities as per the new insurer would be applicable
Portability Process – Portability feature can be used at the time of renewal. There is a window to file for the portability which is 45-60 days prior to policy renewal. The individual needs to submit the details in the portability form. The details of the customer are fed into the portal of Insurance Regulatory and Development Authority of India. The current insurer needs to respond to coverage and claims details of the customer within 1 week and in another 15 days, the decision is made. In case the insurer does not confirm in 15 days, then the policy is automatically accepted.
Problems encountered in Portability – Customers usually apply for portability after making a claim. As most of the claims are made for the ailments that are lifestyle based. The new insurer may not accept the portability request.
One of the major disadvantages is the power to an insurer to accept or reject the policy, if a customer has made a claim in near future, there are chances that the application would be rejected. Also, another problem is the lack of remuneration to the agents for the ported policy.
To Sum up, portability is an excellent feature but the customer needs to be proactive to avail it before any claim is made