Health insurance sales have been on the rise since last March since the pandemic started. People have been “panic buying” health plans. Sales for the entire industry have increased by about 40 per cent. High hospital bills witnessed during the pandemic outbreak, the long tenure of hospitalisation and its associated costs and finally the increase in awareness has been most instrumental in the same. Interestingly, most people opting for a health insurance plan now, in the post-pandemic era, have taken more informed decisions by weighing its pros and cons on their own, rather than depending on others’ advice.

So, people with lower health coverage, especially between the range of Rs 5 to 10 lakhs have ported their plans with higher coverage. This clause of portability was introduced by the IRDAI in the year 2011. According to their legal definition, they would “transfer of the credit gained by the insured for pre-existing conditions and time-bound exclusions if the policyholder chooses to switch from one insurer to another insurer or from one plan to another plan of the same insurer, provided the previous policy has been maintained without any break”. It means one can switch insurers if they are not happy with their health insurance plan, to another insurer, keeping all the continuity benefits intact.

So, with the portability clause, there is no need to sacrifice your “pre-existing diseases” waiting period, no-claim bonus and other continuity benefits. However, the additional coverage would be subject to the existing waiting period clause. Also, fresh medical examinations could be triggered to confirm the current health status before the porting is completed!

The only catch about the portability clause that most people tend to overlook is that it can only be done at the time of policy renewal, and not mid-tenure. Also, porting benefits include only the adjustment of waiting periods. Other clauses, terms and conditions of the new health plan need to be adhered to. However, the porting request can also be rejected, if there is non-disclosure or misrepresentation of any material fact or incorrect information.

Process of porting a health insurance plan

The porting request can be submitted with the new insurance company only 45-60 days before the renewal date. An online porting form needs to be filled along with the previous policy details, claim history and pre-existing ailment list to the new insurance company. This process needs to be initiated a minimum of 45 days prior to the premium due date. Once the porting request is accepted, the older policy can be cancelled; and not before that.

On receiving the required details, the new insurer either accepts or rejects your policy portability request within 15 days. If the new insurer fails to get back, they will mandatorily have to accept the application. The process should be completed within the IRDAI-prescribed time frame.

Bottom line

Portability makes sense when the new insurer offers benefits more lucrative than the old insurer. An insured may opt for portability if the new insurer offers better reimbursement, has more network hospitals, includes customised plans for a chronic disease that you or a family member is suffering from or had a difficult claim history with the existing insurer. However, portability may lead to a higher premium with additional coverage features and enhancements in the policy.

The author is Co-Founder, Turtlemint

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