Irda implements health insurance portability from October 1

You can shop for a new health insurer from October, if you are dissatisfied with your existing one, and carry along your no-claim bonuses and track records. However, you can switch your health insurance policy to another insurer only if you have held the policy for a minimum of one year.

The Insurance Regulatory and Development Authority (Irda) has issued final guidelines on health insurance portability, which will come into force from October 1, 2011.

"It is beneficial for policy holders. They can choose a product with better price and features, which may not be available with their existing insurance provider," said Sanjay Datta, head, customer service, health and motor at ICICI Lombard General Insurance.

Under the new guidelines, a policy holder will have to initiate the portability process 45 days before his policy with the old insurer expires or becomes due for renewal.

SPECIAL: Health cover portability will improve sector | Are you insured enough?

"Portability would drive health insurers to improve their claims-related services since this would be a major factor for customers to switch from their current insurer to another one," says TA Ramalingam, head, underwriting, Bajaj Allianz General Insurance.

Policy holders will be eligible to carry forward the no-claim bonus to the new insurer.

"The biggest benefit is the transfer of waiting period. All benefits will get transferred. A person will not have to wait for the waiting period when they transfer their policy," says Datta.

When you buy a new policy, you become eligible for the benefits immediately only on expiry of the waiting period. Generally, there is a 30-day waiting period beginning from the date of commencement of your policy during which you are not covered for any ailments. In addition, there is ailment-specific waiting period. There is pre-existing disease waiting period as well.

"With portability coming in, a customer can freely move from one insurer to another insurer and transfer the waiting period benefits accrued with their previous insurer." says Ramalingam.