Not happy with your health plan? Port it to new one and carry loyalty benefits

Health insurance policies come with a waiting period of up to four years for pre-existing diseases (PEDs). There could be disease-specific waiting periods too. So, if you already have a health insurance policy, but a recent launch by the same or a different insurer looks more attractive to you or you are unhappy with your existing insurer and simply wish to switch to another insurer, you must stick to your existing policy to avoid losing out on the waiting period benefits. But, you can very well port your policy to the new insurer. It will let you carry forward waiting period, PED coverage or even no-claim bonus (NCB) benefit. The portability procedure is quite feasible and can be processed online. We tell you all that you must know about it:

When to file request for portability

If you are willing to port your policy to another insurance company, you should apply to the new insurer at least 45 days before, but not earlier than 60 days from the premium renewal date of your existing policy.

Unlike telecom portability, you don't have to inform your existing insurer first. Once you fill in and submit the portability form along with the proposal form to the new insurer, it will seek the necessary details of your medical history and claim history from the existing insurance company. It is done through the web portal of the insurance regulator IRDA.

"The existing insurer, on receiving such a request on portability shall furnish the requisite data for porting insurance policies in the prescribed format in the web portal of IRDAI within seven working days of the receipt of the request," says Parag Ved, Executive Vice President and Head of Consumer Lines, Tata AIG General Insurance.

Ved further adds that in reality most insurers accept portability cases even up to three-five days to the expiry date. However, you should still stick to IRDA-specified duration of 45 days before the expiry date lest you get hospitalised post the policy renewal date while the portability process is still ongoing. In that case, neither old nor the new insurer will be liable to cover your hospital expenses.

Will the premium change?

The premium on the new policy may vary depending on the underwriting process of the new insurance company for the particular product. "The premium is calculated based on the age, geography, health conditions and gender in some of the products. However, the premium may differ from insurer to insurer based on coverage, terms conditions, sub-limits / no sub limits, room capping and waiting periods," says Rashmi Nandargi, Head - Retail Health Underwriting, Bajaj Allianz General Insurance.

Are there portability charges?

When you switch to a new policy, the premium may vary, but, be assured that it will not include portability charges. "There cannot be any differential pricing or underwriting between a fresh customer and a portability customer. The premium will be charged as per the product which the customer opts for at the time of porting. However, insurers cannot not levy any additional loading or charges exclusively for the purpose of porting," says Ved of Tata AIG.

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What gets ported, what not

Needless to say, the features exclusive to your old policy will not get ported to the new policy. The new policy will only carry forward waiting period benefits. Accumulated no-claim bonus will have two aspects to it. If the medical coverage of your existing policy is Rs 10 lakh with Rs 2 lakh no-claim bonus, and if you buy the equal (Rs 10 lakh) sum insured policy with the new insurer, your NCB amount will not be taken forward. However, if you opt for a higher sum insured, your NCB amount will be carried forward, but the waiting period benefits will be limited to sum insured and cumulative bonus of the old policy, not the entire sum insured of the new policy.

Amit Chhabra, Head - Health Insurance, Policybazaar.com explains it with an example: "A customer had bought a Rs 10 lakh coverage policy five years ago, during which he accumulated NCB of Rs 2 lakh. Now he ports to the new policy of Rs 20 lakh sum insured. In case he gets hospitalised due to diabetes, the medical bill only up to Rs 12 lakh will be covered by the new policy even as the new policy coverage is Rs 20 lakh. For diseases which don't have a specified long waiting period will be covered up to Rs 20 lakh though."

As you go for porting the policy, make sure to upgrade it not only for present but also the future needs. "With porting you can customise your policy to an extent if you could not to do so earlier such as choosing some add-ons or increasing your sum insured," says Nandargi of Bajaj Allianz.

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