Health Insurance Porting vs Buying New Plan in 2022: What is Better for You?

Porting is not always certain. In case the new insurance company is not willing to port an existing plan, one may look at buying an additional policy to supplement coverage

health insurance porting

Amid rising health uncertainties, having adequate health cover has become a must for every individual. Since the outbreak of Covid19 pandemic, health insurance awareness has increased. And a large number of people have subscribed to various health plans. However, there are times when the current policy or the current insurance company disappoints policyholders by not providing required coverage or desired support in times of need. Such situations force policyholders to look for another plan or insurance company with a better track record.

While the option of buying a new plan is always available, not many are aware that just like mobile number porting, it is possible to port health insurance plan from one company to another also. But is it advisable?

Experts suggest that one should always first try to port his/her health insurance plan instead of buying a new one.

“Try porting first, before you consider buying a new one. Porting provides continuity benefits in areas such as waiting periods and no-claim bonus-related increases in sum insured,” Srinath Mukherji, Co-Founder of SANA Insurance Brokers, told FE Online.

However, it is important to note that porting is not always certain. In case the new insurance company is not willing to port an existing plan, one may look at buying an additional policy to supplement coverage.

“Porting depends on the willingness of the new insurance company to port an existing policy, and its underwriting conditions for porting (including additional loading on premium). If no insurer is willing to port the policy, or if the underwriting conditions laid down are excessive, then consider buying an additional new policy to supplement your coverage,” said Mukherji.

“You can stop the earlier policy after the waiting periods of the new policy are over. This might require paying higher premiums during the waiting periods toward both the existing and new plans, but the biggest advantage is that you will stay protected against high hospitalization expenses in the interim,” he added.

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Analyze reason for porting

It is always advised to port an old health insurance policy in case you want to switch from one insurance to another. As discussed above, when you port a health insurance policy you can enjoy better product features, higher coverage, better serviceability. Porting health insurance policy offers flexibility to policyholders as the processes are usually seamless.

However, experts say that before porting a policy, it is important to analyse the reason as to why you want to do it.

“Before porting or choosing a new policy, you need to analyze the reason for porting. Porting a health Insurance policy makes more sense when you are not satisfied with your current insurer’s service, or there is a lack of transparency, or when you feel the benefits do not match the requirements. However, it is suggested to do thorough market research before and checking out the options properly from other market players. The major USP of porting is that you can get the continuity benefit in terms of the waiting period of pre-existing diseases which you have accumulated in the previous policy,”Aatur Thakkar, Co-founder and Director at Alliance Insurance Brokers.

Reasons to consider porting

There are several reasons when you should consider porting to a new plan.

“When your current insurer is not offering you the desired support or proper resolution to your issues, when your current insurer is not offering you sufficient coverage for specific medical issues, when there is no complete transparency or disclosure about the plan coverage mentioned in the policy document, when you are getting better coverage/benefits plan options from other insurer and lastly when your current insurer’s plans are at the higher premium rates with the similar benefits as that of the other plan with comparatively lower premium rates,” Rakesh Goyal, Director, Probus Insurance said.

“Other reasons for porting your current health plan could be if your current plan only offers coverage to individuals and you wish to add your spouse to your plan post-marriage, during change of job or change of address (in case of no better options of network hospitals in your new locality). One should also ensure to read the policy documents carefully before porting to another plan as there is a possibility of transferring the credits (for time-bound exclusions or pre-existing diseases) from your current plan to the new plan,” he added.

Key points to consider before porting

Pre-Existing Diseases

Policyholders with pre-existing diseases (PED) should first check whether porting to a new insurer is possible, and whether the insurer requires pre-medical screening. Most new policies have a waiting period for PEDs of up to 4 years, during which the customer will not be able to claim any related expenses.

Porting, on the other hand, can happen with continuity benefits, i.e., waiver of waiting period already spent.

For example, if you have a policy that is 4 years old, your PED-related waiting periods in the existing plan should be mostly over. When you port this policy into a new one, the new insurer will not restart your waiting periods again. Instead, it will treat you as though you have already spent 4 years in the new policy. However, most insurance companies are hesitant to accept porting with PED as the risk of hospitalization is higher, said Mukherji.

Age at the time of porting

Most insurance companies are hesitant to sanction coverage for the aged, given their sensitive health conditions and the risks involved. For senior citizens who are unable to port their plan, it is recommended to consider buying an additional new plan. Needless to say, it is always better to port or buy a policy when you are young.

Changes in Sum Insured

“There could be instances where the new insurer might not offer the exact sum insured as in the existing policy. In such cases, the insured member would have to opt for the nearest higher sum insured amount, and the differential amount would be treated as though it were a “fresh” application. This means that all the terms and conditions mentioned in the new plan (such as waiting periods, sub-limits if any etc.) would apply to the differential amount,” said Mukherji.

A higher sum insured would require meeting the underwriting and medical guidelines issued by the new insurer. Depending upon the new insurance company’s underwriting decision, the application could be accepted at par or with additional premium loading / co-payment, or it could be rejected if the risk of insuring appears to be too high.

“Existing plan should be active at the time of porting: The process of porting takes an average of 45 – 60 days to come into effect. Hence, insured members must ensure that the porting process is initiated well in advance, say 1-2 months before the renewal date,” said Mukherji.

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