Have you ever switched mobile service providers when you’ve experienced difficulties with the service? If you have, you would realise it wasn’t too much work, in fact in many cases you could retain your number and simply switch over to a provider and network that meets all your needs. The same applies when you port your health policy. A health insurance policy is yet another integral service where you just can’t afford to have any glitches.
The Insurance Regulatory and Development Authority of India (IRDAI) has allowed health insurance porting since 2011. This means you can change/port your health policy if you are unhappy with the services rendered by your insurance provider. Let’s run you through all you need to know about porting a health insurance policy!
How Can You Port Your Policy?
All health insurance products can be ported (individual or floater policies); however, you can only switch over to a similar policy. For example, you can port your policy from one insurance company to another, but you cannot port between two different types of policies, such as porting from a policy for personal accident cover to one for critical illness cover. Bear in mind, you can only port your policy when it’s time for renewal, and not when it is still in effect.
What is a Continuity Benefit?
When you port your policy from one insurer to another, you will be allowed continuity benefit, i.e., in case of waiting period for pre-existing diseases/ conditions, the wait time lapsed for your earlier policy will be carried forward to your new policy. For example, if the current policy stipulates a three-year waiting period for pre-existing conditions, and you have been covered by the policy for two years, and if your new policy has only a two-year waiting period, you will now be covered for pre-existing conditions from Day 1 in the new policy.
This benefit is extended for other common clauses in health policies as well, such as on waiting period for specific ailments like joint replacement procedures, cataract surgeries, etc.
Transfer of No-Claim Bonus
Policyholders can also enjoy the advantage of transferring the no-claim bonus (NCB) while porting policies. An NCB is typically added to your original sum insured as a bonus if you haven’t made any claims. For example, if your sum insured (SI) is INR 3 lakhs and you have renewed your policy without a claim for two years, you may be eligible for an NCB, which will get added to your sum insured (SI), thereby increasing it to INR 4 lakhs now. If you have decided to port your policy in the third year, you will be eligible for an SI of up to INR 4 lakhs on your new policy. Your premium for your new policy, however, will be calculated on the higher sum insured, i.e., INR 4 lakhs in this case. If you opt to continue with your old insurer, you will have to pay premium only for the original sum insured, i.e., INR 3 lakhs.
Things to Keep in Mind
Here are a few other essentials to bear in mind when you decide to port your health policy:
Eligibility for porting policy: A key parameter to port your health insurance policy is that you should have renewed it without a break.
Insurer to weigh in: Insurers are not required to take up all porting requests that come to them, which means there is a chance that the new insurer you are applying with might reject your proposal.
Consider your age: If you want to port to a new policy, age is a factor to be considered as higher the age, combined with health complications if any, higher is the premium as well. If you are younger and in good health, and unhappy with your current health insurance policy or provider, it would be better for you to opt for a new policy afresh rather than go through the hassle of porting your policy. However, for those over 40 years, porting could be a better option as a new policy would mean longer waiting period for certain conditions according to your new policy terms and conditions.
Terms and conditions: Continuity benefit and NCB are the only two transferrable benefits while porting policies. Exclusions, sub-limits on expenses, day-care coverage and other policy terms and conditions cannot be ported.