Health Insurance Portability - from one insurance company to another insurance company
Framing New Norms on Health Insurance- Insurance Regulatory and Development Authority (IRDA) has issued guidelines vide circular dated 9.9.2011 implementing portability of health insurance policies amongst non-life insurance companies w.e.f. 1.10.2011. The health insurance policy holder by virtue of the said circular can, at the time of renewal, switch:-
i) from one insurance company to another insurance company of his choice; or
ii) from one insurance plan to another insurance plan with the same insurance company.
For those of you unhappy with your current health insurer, portability could be quite an advantage as it lets you carry forward the existing benefits. Health Insurance portability is now here to stay giving consumers more flexibility. Here is an overview of what they have in store. By the process, the policy holder will not lose the credits gained in terms of waiting periods for pre-existing conditions, time-bound exclusions, etc.
The Health Insurance Policy Holder can at the time of Renewal of his/her policies can shift to another Insurance Company for a similar product, if he is not satisfied with the present Insurance Company for any reason, without losing the Credits gained, if renewed with the existing company. This was not the case earlier; because change in insurance company or plans amounted to loss of these credits and the policies started as new, carrying all time limitations afresh.
Thus "Portability" helps to have a level playing field for all insurance companies and the Customer can choose and compare benefits across products and Companies. IRDA has also provided a portability portal facilitating easy data transfer between the insurance companies.
The views of the General Insurance Council and Life Insurance Council were taken into account by IRDA while finalizing the Portability circular dated 9.9.2011.
This information was given by the Minister of State for Finance Shri Namo Narain Meena in written reply to an Unstarred Question in Lok Sabha today (16-Dec-2011).
What is Pre-Existing Diseases (PED)
Pre-Existing diseases are those health conditions declared at the time of applying for the insurance policy. Health Insurers follow a practice of maintaining a waiting period in the initial years of the policy, during which time, such PEDs will not be covered under the policy. Once this waiting period, is over, the PEDs are included under the policy cover. In the absence of portability, moving over to another insurer meant, losing out on this waiting period. The new insurer would consider you as a fresh customer and would impose his own waiting period on the fresh policy taken. Portability of health insurance permits you to switch over from your existing insurance provider to another one, under the same terms and conditions. So as a client you would not be required to compromise on your existing benefits or fear losing the waiting period of Pre-Existing Diseases (PED), while opting for the new policy.
What are the main benefits of Insurance Portability?
Carry Forward of Pre-Existing Diseases (PED) - Health Insurance Portability comes as a help for individuals with a Pre-Existing Diseases. Portability lets you carry forward the Pre-Existing Diseases waiting period, to the new insurer of your choice.
Waiver of Window period - All health insurance policies come with a window period of 30 days, in which time, any disease that arises is not covered. With health insurance portability such a waiting period is waived off.
Accrued Bonus – All accrued bonus of the policy could be carried forward to the new one.
When would you opt for Insurance Portability?
You can opt for insurance portability in the following situations.
a) Unsatisfactory/poor client service - When you are not getting expected service form your present health insurer, opt for another one who could offer you superior services
b) Changes in jobs or Shifting of residential place - When shifting jobs your new employer may probably offer health insurance through a different provider. Portability comes in picture here to help you transfer the existing benefits to your new policy. Similarly for those moving cities, wherein the current insurer does not have a service outlet, portability lets you switch over to a new insurer who would be able to service you in that city.
c) Policy exclusions - Many a times, you sign health insurance policies without giving much thought to the exclusions in the policy. If there is a specific cover you seek which could be exclusion under your current plan, look out for another policy that covers such a thing.
d) Maximum age of Policy renewal - The maximum renewal age of policies vary from insurer to insurer. So if you have exceeded the maximum age for renewal under your current policy, check for other insurers who could cover you at your age.
e) Excess premium charged – if the premium charged by the current insurer is more you can opt for another health insurance provider without compromising the services and other additional facilities (more clarity required)
f) Hospitals networks - The hospitals covered by the current insurer is not satisfactory, you opt to shift to another service provider who offers the services of good hospitals with required modern medical facilities
g) Exclusion clause related to treatment under Ayurveda, Unani, Siddha, Homeopathy etc and the maximum limit of expenses re-imbursement.
h) Calculation and treatment of no-claim cumulative bonus
Conclusion
Being a new concept in India, health insurance portability is still in its infant stages. Though IRDA has prescribed a set of guidelines for the proper functioning of portability, the whole concept still shows presence of uncertainty. Lack of clarity exists on no claim bonuses, free medical checkups, and portability between indemnity and benefit policies. Also, though waiting period and accrued bonus could be carried forward, compete benefits from earlier insurance company may not be permitted to be carried forward.
Thus, as a client, it is wise to be clear of what you seek from your health insurance policy. Do your home work on what you expect from your insurer and switch over only if you are sure of getting a better deal from the new insurance company. You are the final judge.
This article is only for general information. In case you need more information, please contact your insurance company or an approved insurance agent. Errors and omission are expected.
Best Regards
Prakash Nair
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