This week’s podcast discusses Health insurance portability. We have with us Sai Prabhakar, Principal research analyst to help us understand the basic idea behind porting and what to watch out for in the process.

Hello Sai! What exactly does Health insurance porting mean and when should it be considered?

Hello Keerthi, As most of us know Health insurance can offer protection for pre-existing diseases only after a waiting period of 2-4 years. So if a person has completed a portion of the waiting period but also wants to change the service provider for various reasons, he/she must port the insurance. Porting allows transfer of the residual waiting period, so as not to undergo the waiting period again with the new insurer. Compared to a simple replacement buying of insurance, porting which allows for transfer of waiting period is quite a useful feature. 

What is the procedure involved in porting? 

A written application with the name of the new insurer is presented to the current insurer. This must be done at least 45 days before the premium renewal date. A grace period of 30 days is also provided for premium payment if a policy is under porting. The new insurer is informed by the old insurer who must process the application within 15 days and declare their acceptance or rejection. The insurer meanwhile collects the policy documents, portability form and other relevant details like no claim bonus from the present insurer, which can also be ported.  

No-claim bonus is the reward shared with the insured on not claiming health insurance in the year and is a valuable asset worth porting. 

Ok .. What about the terms and conditions and the pricing. Will they remain the same or change significantly? 

All other terms and conditions including premium prices will be at the discretion of the new insurer and which may most likely be at a higher cost. At a later date of porting - age risk, normal inflation and post-pandemic re-insurer premiums would most likely increase premium.  For instance, premium for a health policy issued at the age of 30 and ported at the age of 33, will be inflated by the higher age category of the insured and the normal inflation in services.

Underwriting is another factor which has to be considered apart from price increases. Underwriting or risk analysis including medical and financial queries will not be invoked if the sum insured, the basic features of the policy and disease coverage are not changed while porting. In other​ cases, underwriting can be invoked which may or may not lead to higher premiums again. Also advanced age while porting or a history of one or more porting requests can also lead to tough underwriting standards, robbing one of insurance protection in extreme cases. 

Thanks, Sai, for explaining the basic aspects of porting. From what I gather, even though the option to porting exists, exercising due care prior to purchase seems most pragmatic. 

That’s all from us listeners. Thank you for tuning in.   

Let’s meet next week with another interesting topic.   

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