The nitty-gritty of porting health policies

Health insurance companies constantly update their policy offerings with wider coverage as individuals face more and more health issues owing to changes in the natural environment (increase in air pollution, quality of food) and lifestyle changes. If you, as a policyholder, want to port to a new and better health policy in the market, here is what you should know.

Pros and cons

There are two key benefits involved in health insurance portability. One, policyholders will get continuity benefit. If you have already served your waiting period in the initial health insurance (initial waiting period, disease-specific waiting period and pre-exiting conditions waiting period), it will be waived in the new policy.

For instance, if you were with a policy for three years, your initial waiting period will be waived while porting. Similarly, if your current policy has a four-year waiting period for pre-exiting diseases, you have to wait for just one more year.

The second important benefit that gets transferred is the no-claim bonus (NCB). If you do not make any claim over a long period, the insurer gives certain percentage of the sum insured as a bonus — NCB. For instance, if you have a ₹10-lakh policy and the insurer gives an additional sum insured of ₹1 lakh (10 per cent of SI) as bonus, when you port, you are eligible for an SI of ₹11 lakh on the new health policy. But note that the premium will calculated on the higher SI (₹11 lakh) and not on the ₹10 lakh of your previous policy.

Porting of health policies has its downside as well. You can only port between similar health policies. That is, if you have a mediclaim policy, you can only port to another mediclaim policy, and not to a critical illness policy.

Further, you can only port at the time of renewal. That is, you have to port at least 45 days prior to the premium renewal date of the health policy, and not during the policy. A policyholder is eligible to port only if he/she has renewed the policy without a break.

Keep in mind that insurers may also reject your porting request if it is not as per the company’s terms and conditions. You may be asked to undergo medical check-up as well if you are beyond a certain age, say 45 or 50 years. In addition, for the same SI, your premium payment may increase in case of any new health complication or higher age.

Porting procedure

The procedure to port a health insurance policy is simple, and most of the processes are made available online by insurers. Keep an eye out for the co-pay and the deductible amounts of the new policy versus the old policy, before you port.

Apply for portability 45 days prior to the expiry of your existing policy. However, according to Amit Chhabra, Head - Health Insurance, Policybazaar.com, you can apply for porting five days before the renewal or even on the day on which the existing health policy expires. The procedure is seamless, but it is advisable for the customer to apply early to avoid unnecessary complications, Amit says.

You can contact the new insurer to initiate the porting procedure or apply online (on the new insurer’s website) for the same by filling up an application form.

The new insurer will have to check your details (such as medical and claim history) with your existing insurer within a period of seven days. Once the information is received by the new insurer, the same will have to be processed, and the policy should be given to the customer within 15 days.

In case there is a delay from the insurers’ end and the time taken goes beyond the 15-day period, the insurance company is bound to accept the policy.