The pandemic has made people aware not only about the indispensability of health insurance policy but also about the need to have adequate coverage, better features and seamless services. The realisation has led to more people porting their health insurance policies during the COVID times.
“There has been a fairly sharp increase in portability. We see more and more people now opting for and showing interest in porting their policies. Of the 100% of the premium our portability used to be about 15 per cent but that number has now gone to 25 per cent,” says Amit Chabra, Chief Business Officer of Policybazaar's health insurance unit.
Insurance portability is a process when a policyholder switches its insurance policy from one service provider to another without losing out its benefits gained in the existing policy.
According to data shared by Policybazaar, 63 per cent of their customers ported for a better price and higher sum insured, while the remaining 37 per cent ported for better features and services. Moreover, 54 per cent of customers in Tier 1 cities ported their policies to higher cover followed by 18 per cent in Tier 2 cities and 28 per cent in Tier 3 cities.
Experts say since the time Insurance Regulator and Development Authority of India (IRDAI) came up with standardised portability process and mandated carrying forward of certain benefits like waiting period waiver etc., they have seen a rise in portability.
“We specifically witnessed this trend during COVID-19 times when many customers ported to Niva Bupa. The increase in incidences of portability coincided with more customers going to bigger and better-equipped hospitals during the same period,” says Bhabatosh Mishra, Director Underwriting, Products and Claims, Niva Bupa Health Insurance.
Mishra adds, “Portability is largely attributable to ‘flight to safety’ where customers want to opt for brands and companies which are more established with a track record of delivery, both in insurance and healthcare sector.”
Reasons for the jump in health insurance portability
IRDAI’s standardisation of portability procedure and mandate of carrying forward benefits like waiver of waiting periods, among others, has helped customers port with greater confidence and ease.
“There are several factors that have led to increase in the health insurance portability. COVID did see flight to safety, i.e. customers choosing more established brands with consistent track record of service delivery. New innovative products launched by insurers, ease of purchase etc also played a role in increase in portability,” says Mishra.
How to port a health insurance policy
A policyholder has to intimate the new health insurance company 45 days prior to the renewal of the existing health insurance plan. The policyholder has to fill out the proposal form and submit it to the new company.
After receiving the portability form the new insurance company shall seek necessary details from the existing insurance company within 5 days, as per the IRDAI’s guideline. Once the new insurance company receives all the information, it has the right to accept or reject the policy within the given duration. If the decision is not taken within this period, they will have to accept the portability application.
Before porting your policy, you need to carefully assess pros and cons of switching insurance companies so that you get wider coverage than the existing one.