Buying the right health cover is extremely important. But what if you end up buying a health insurance plan for yourself and your family, and after a few years realise that it doesn’t really meet your future medical requirements. The Insurance Regulator Development Authority of India (Irdai) has now given you the choice to change your insurance company without losing the accumulated benefits by allowing porting of health insurance.
Here’s when you should think of porting your health insurance to a new one.
New product with better features
You should port your health insurance to a new product if the latter not only fulfills all your medical requirements but also gives you a few additional benefits. For instance, assume you are a 30-year-old single man and you bought a policy with a sum insured of R5 lakh from Insurer A for your family—your parents being 55-year-olds. Your current policy does not have any wellness features and also has a mandatory 20% co-payment for policyholders above 60 years.
So while today, your parent’s hospitalisation expenses may be covered by the health policy, five years later, it will not be the case. So for any hospitalisation expense incurred, you will have to pay 20% of the bill from your own pocket.
Now, another insurance company, let’s say Insurer B, comes up with a plan after five years that offers wellness (free annual health check-ups in their network hospital) as well as no co-payment feature along with all the features that your current policy has. You can request porting of your health cover to the new insurer without worrying about losing out on accumulated benefits or continuity benefits. All you need to do is fill out a form with all disclosures about your and your family’s medical history and if it finds merit in the application, your policy will be ported.
Bad experience with current insurer
Another valid case for porting is a bad experience with your current insurer. Again, assume you have bought a health policy of R5 lakh from insurer X. You have disclosed all material facts truthfully as required. At the time of a medical emergency, you realise that the nearest and the best hospitals in your area do not come under the cashless network of the insurer. You have no option at that time but to get the treatment done. The treatment costs you a hefty sum which you pay from your own pocket. You subsequently send the bill to the insurer for the claim. However, it takes over two months to reimburse your claim. You feel that the insurer has not been sensitive to the trauma you have gone through and want to port the policy. However, portability is a little difficult when there is a claim from your side. It tends to influence the new company about profitability from you if they accept you as a customer.
Family floater is a single health policy that covers an entire family. Now imagine that you just got married and you and your significant other have separate health covers. You realise that paying premiums of two different health policies is quite expensive and will soon affect your budget. You should think of porting your health insurance so that both you and your partner can enjoy the same benefits without having to pay a hefty premium every year.
Porting of health insurance should be done only if you are getting a better deal at hand. You must remember that before accepting your application for portability, the new insurer will reassess you and only then issue the policy. The process is not easy and you shouldn’t do it only for the sake of it.
Choosing the right insurer
- Currently, Irdai allows portability of only health insurance policies
- You can change your insurance company without losing the accumulated benefits
- Before porting your policy, ensure that the new product gives you a better deal
- Remember, the new insurer will reassess you before issuing the policy
- Portability becomes difficult when there has been a claim from your side
The writer is co-founder & CEO, PolicyBazaar.com