Health insurance has now become a necessity to ensure financial security during unfortunate health emergencies. With the increasing costs of medical treatment, health insurance can be expensive, and one may need to switch insurance companies for better benefits.
To address this need, the Insurance Regulatory and Development Authority of India (IRDAI) has introduced the concept of health insurance portability. This allows policyholders to switch from one insurer to another or migrate between different health insurance plans without losing key benefits, such as the waiting period already served for pre-existing conditions. This ensures that individuals do not have to start over when changing policies, making it easier to find a plan that better suits their evolving healthcare needs.
Let us delve into health insurance portability in-depth and understand its meaning and benefits. Also, know the rules, documentation required, and the process to follow when porting a health insurance policy.
What is health insurance portability?
Health insurance portability allows policyholders to switch their health insurance policy from one insurer to another without losing essential benefits such as waiting period credits and no-claim bonuses. As long as the policy is renewed on time, individuals can seamlessly transfer their coverage while retaining accumulated advantages.
The key advantage of porting a health insurance policy is that it eliminates the need to restart waiting periods for pre-existing conditions. This ensures continuity in coverage and provides the flexibility to choose an insurer that offers better benefits, competitive premium rates, and a strong claim settlement record. Portability empowers individuals to make informed decisions and opt for a health insurance plan that best meets their healthcare needs.
Advantages and disadvantages of health insurance portability
Here is a quick comparison of the benefits and drawbacks of porting health insurance:
Advantages |
Disadvantages |
Continued coverage – Ensures uninterrupted health insurance while switching policies. |
Loss of continuity benefits – Some accumulated benefits from the previous insurer may not be carried forward. |
Better coverage options – Allows you to choose a plan with enhanced benefits like OPD cover, maternity benefits, or wellness programs. |
Waiting period reset – Some insurers may require you to serve a fresh waiting period for pre-existing conditions. |
Improved services – You may get better customer support, faster claim settlements, and additional healthcare benefits. |
Possibility of higher premiums – The new insurer may charge a higher premium based on your health profile and age. |
No loss of accumulated benefits – Waiting periods already served for pre-existing conditions are usually carried forward. |
Limited flexibility for future changes – Some insurers may impose restrictions on policy modifications post-portability. |
Competitive premium rates – Porting allows you to explore cost-effective options with similar or better coverage. |
Certain deductibles may apply – The new insurer may impose additional deductibles or conditions on the policy. |
What are the common reasons for porting a health insurance policy?
Here are some of the common reasons to opt for health insurance portability.
1. Better coverage and benefits
A key reason for porting a health insurance policy is to secure better coverage and benefits. Policyholders may switch insurers to gain access to features like broader network hospitals, additional riders, or more comprehensive treatment options for various medical conditions.
2. Cost-effectiveness
Many policyholders port their health insurance to reduce premium costs while maintaining or enhancing coverage. Switching to a more affordable insurer can provide the same or better health services, making it a cost-effective choice for managing healthcare expenses.
3. Age and health conditions
As policyholders age or develop health conditions, porting can help find plans better suited to their needs. Some insurers offer tailored policies with fewer restrictions, more coverage for pre-existing conditions, or better benefits for older individuals.
4. Unsatisfactory service
Lack of transparency or poor service quality from the current insurer pushes one to consider switching their health insurance policy.
5. Relocation
Suppose that you move to a new city or area where you do not have access to the current insurer’s network hospitals. Then, you may opt to port the health insurance policy.
6. Increase in premium
Many a time insurer increases the premium after making a claim. This may not fit your budget. Hence, you can look for a health insurance policy with a lower premium.
7. Poor claim settlement process:
Another major reason for porting health insurance policies is the slow and cumbersome claim settlement process. Usually, one should prefer a high claim settlement ratio in health insurance for easy claim process.
8. Delay in reimbursements:
One of the most common complaints policyholders raise against their health insurance provider is the delay in claim processing and reimbursements. The last thing anyone would want in a medical emergency is waiting to get the claim amount reimbursed. Porting your policy to a more responsive provider can help ensure timely financial assistance during health crises.
9. Hidden clauses and conditions:
Sometimes, insurance companies bury specific clauses or conditions in their policy, making it challenging for policyholders to avail of the benefits. Porting your health insurance policy to another provider that offer transparent transactions and benefits will help you understand your policy better and leave no room for surprises.
10. Unacceptable co-payment clauses:
A co-payment is the percentage of the hospitalisation expenses that the policyholder must pay out of pocket. There are times when the co-payment clause in your current policy may be too high and becomes a burden instead of an added benefit. Porting your policy to another provider can help you find a more affordable co-payment option.
11. Limits in room rent:
Room rent limits can cause obstacle when seeking treatment at hospitals. Many policies have a cap on the room rent, which could limit your treatment options. Porting your policy to a provider that offers a better room rent allowance can give you the upper hand.
12. Better plan and services from another health insurance provider:
Another reason to port your policy is if you find a better plan and services from a different health insurance provider. Handpicking a policy that caters to your needs and suits your budget better is a wise financial decision.
13. Lack of communication for personalised services:
Communication and personalised services are crucial in the health insurance industry. Porting your policy to a provider that offers better customer service and personalised support could make your life easier.
Why should you port your existing health insurance?
Health insurance portability offers policyholders the flexibility to switch insurers without losing key benefits. If your current health insurance plan no longer meets your needs, porting can help you find better coverage, lower premiums, or enhanced services. Here’s why you should consider porting your health insurance policy:
Better coverage options
Porting allows you to switch to a plan that offers wider coverage, including additional benefits like OPD expenses, maternity cover, or wellness programs.
Retention of waiting period benefits
When you opt for health insurance portability, the waiting period already served under your existing policy is carried forward, ensuring continued coverage for pre-existing conditions.
Lower premium costs
If your current insurer has increased premiums, porting enables you to explore more cost-effective plans without compromising on coverage.
Improved claim settlement process
Choosing an insurer with a strong claim settlement record ensures hassle-free claim approvals and better customer service.
Customisation and add-ons
Portability gives you the option to select plans with better features, add-ons, and top-up covers tailored to your healthcare needs.
Benefits of porting a health insurance policy
Porting your health insurance policy comes with significant benefits, and here is what you gain.
1. Protection of No Claim Bonus:
When porting a health insurance policy, you retain your accumulated No Claim Bonus (NCB). This means your premium discounts and increased coverage earned from claim-free years are protected and carried over to the new insurer, ensuring continuous rewards.
2. Avoiding reassessment:
Porting your health insurance allows you to avoid a reassessment of your health conditions by the new insurer. You won't need to undergo additional medical tests or evaluations, preserving your existing terms and coverage without further scrutiny.
3. Carry forward of waiting period credit:
One of the key benefits of porting is that your waiting period credit for pre-existing conditions is carried forward. The time already spent on the waiting period with your current insurer is recognised by the new insurer, ensuring seamless coverage.
4. Eliminates loss of benefits:
One of the key advantages of health insurance portability is that you do not lose any benefits accumulated over time on your policy. This means you do not have to serve any initial waiting period in health insurance or if completed the specified waiting period, then it will get carried forward. Suppose that your previous health insurance company had levied a 2-year waiting period to avail the coverage for a knee replacement surgery, and you have already served two years. Then, after porting you can directly avail the benefits.
Similarly, your no claim bonus will also remain intact. The insurance company automatically transfers these benefits to the new insurer.
5. Ensures continuity of coverage:
Health insurance portability ensures that you do not have a gap in coverage. This is especially important since the new insurance company may not cover the pre-existing conditions in case of a gap in coverage.
6. Offers the option to customise the health insurance policy:
The flexibility of porting a health insurance policy enables you to customise your health coverage according to your unique needs and requirements. This could mean opting for a policy that covers you and your family comprehensively or a policy that caters to specific illnesses or diseases.
7. Gives the option to choose plans with budget-friendly premiums:
Portability of health insurance policies means you can seek plans that offer similar/better coverage at a more affordable premium.