As you are aware Insurance has become one of the most important necessities of our life, same as food, shelter, education etc. Insurance provides us indemnity from financial loss in case of happening of any accident or disease. We have feel the necessity of insurance in the period of COVID-19, in which lot of people expended their hard-earned monies on treatment because they did not had insurance coverage.
There are numbers of insurance companies providing number of products in the market. For a common man it is difficult to choose right insurance product. There are mis-selling, Mis-representation, fraud , personation etc. through which an innocent costumer is loosing its money in the insurance market. These cons/ fraudsters are even not leaving senior citizens. The insurance intermediaries such as brokers, Agents, IMFs etc. are also involved in mis-selling and mis-representation for sake of their commission from insurance companies. They are focusing on quantity of business and not quality of business. The insurance agents are first contact point between a customer and the insurance company and they are also engaged in fraud/ mis-selling.
It is important now days to be aware of these activities before going to buy an insurance policy. It is better to buy an insurance policy directly from website of the company and directly discussing with representatives of the company. You have to check terms and conditions of the Insurance Policy and read the fine -print so that you will assure yourself that you have find the right product at right price.
The IRDAI has provided facility of Portability through which you can port your insurance policy from one insurance company with other insurance company. Suppose you have a policy with ABC Insurance Ltd. , and you are not happy with services of ABC Insurance Ltd., in this case you can port your insurance policy with ABC Insurance Ltd., with XYZ Insurance Ltd.
In this case credit earned in your policy with ABC Insurance Ltd., will be transferred to policy with XYZ Ltd., such as No Claim Bonus, Pre-existing Disease Period etc.
What is Health Insurance Portability?
Health insurance portability is the right given to an insurance policy holder to transfer the credit gained by the insured (for no claim bonus, time bound exclusions and pre-existing conditions) if the insured member wishes to switch his/her insurer. For this, the previous policy would have to be held without a break.
PLEASE NOTE THAT: In 2011, the Insurance Regulatory and Development Authority of India (IRDAI) introduced health insurance portability in the country. According to IRDAI guidelines, you can port your existing health insurance plans from one insurance company to another, without losing accumulated benefits, like No-Claims Bonus (NCB), cumulative bonus and avail benefits of the waiting period waiver due to ongoing policy term.
When to Port your Existing Health Insurance Policy?
You can consider availing the feature of health insurance portability in the following cases:
1. Not being satisfied with the features of your existing policy
There can be a situation, where you are not satisfied with the benefits of your existing policy, or the services of your current insurer. Maybe the existing plan provides limited coverage, or it entails high health insurance premiums. If you find that the existing plan is not well-suited for your health insurance portfolio, you can always consider porting it to another insurer.
2. Choosing to select a better plan
While buying a health insurance policy, group health insurance policy you must always compare health insurance plans, and zero in on the policy, which fits your requirements. However, if you find that there are better and more affordable plans by other insurers, you can choose to port your existing plan.
Things to remember while availing of Health Insurance Portability
1. You can opt for portability only in the case of individual health insurance plans and family health insurance plans .
2. Remember, in the case of group health insurance plans, this feature is not available, and you have to continue with the existing insurance company. Remember, only retail policyholders with non-life insurance companies can apply for porting the existing health insurance plan.
3. Along with yourself, you can port all currently insured family-members, the existing sum insured, the accumulated cumulative bonus, NCB and your pre-existing and specific disease waiting period.
How to port your existing Health Insurance Plan?
You can port your existing health insurance policy, and opt for a healthier plan in four simple steps. Remember, as per IRDAI guidelines the stipulated time-period as listed below has to be completely adhered to:
- Step 1: You have to duly fill the portability form, and send the application to the new insurance company, 45 days before the date of renewal.
- Step 2: The new insurance company - as per the guidelines of IRDAI - will seek you medical and claims history from the previous insurer within 7 days of receiving the portability form.
- Step 3: Your previous insurer then has to furnish the details within 7 working days.
- Step 4: Once the new insurance company receives the requisite information, it has to communicate its decision - either approval or rejection - within 15 days.
Rights of a policyholder while availing Health Insurance Portability
1. Every policyholder has the right to port both individual and family health insurance plans from one specialized/general insurance company to another.
2. The new insurance company must provide for the same sum insured or higher if the insured is eligible to receive the same as per insurance company's internal underwriting policy.
3. The new insurer has to provide all continuity benefits, like cumulative bonus, waiting period benefits and NCB.
4. According to IRDAI guidelines, it is the responsibility of both previous and new insurers to ensure that the health insurance plan has been successfully transferred.
Can the request for Health Insurance Portability be rejected?
Yes, as per IRDAI guidelines, your application for portability can be rejected in the following cases:
- If there is inadequate information available about the policyholder.
- If the policyholder has made multiple claims, resulting in a poor claim history.
- If proper documents are not submitted within the stipulated time. You need to submit at least three years of policy documents from the previous insurer.
- The portability application can also be rejected, if your previous policy has lapsed, or there is a break in policy renewal.
- The portability application can also be rejected, if the applicant is a senior citizen.
FRAUD IN CASE OF PORTABILITY OF INSURANCE POLICIES
Two major issues arise when porting a policy.
i) First, agents may bypass the porting option in paperwork to issue a new policy and earn a commission.
ii) Second, they might port your policy but fail to disclose your previous claims and illness history to new insurer.
This omission is critical because only when previous claims are declared, the new insurer needs to obtain your claim history from the old insurer. Agents avoid this to ensure the new insurer underwrites the policy and they secure their commission. This misuse can be particularly damaging for older individuals, who may lose continuity benefits, face claim denials, and end up underinsured.
PLEASE NOTE THAT: According to the Insurance Regulatory Development Authority of India (IRDAI), after the expiry of the five-year( Earlier this was Eight Years) moratorium period, health insurance claims cannot be contested except for proven fraud and permanent exclusions specified in the policy contract. However, this rule can be tricky when porting a policy, as you need to declare your health condition again at the time of porting.
If a claim is needed and the new insurer discovers undisclosed health conditions at the time of porting, they can reject the claim, regardless of how long your policy has been in force. Non-disclosure at the time of porting can also lead to policy cancellation, affecting your future insurability. IRDAI states insurers should check claim history, but many port policies without proper underwriting.
PLEASE NOTE THAT: The policyholders' data is often bought and sold to target individuals with porting offers as their renewal date approaches. "Policyholders are enticed by offering low premiums but in many cases, they hike the premium from second year onwards. Moreover, it's essential to scrutinize the details of the new policy, as the devil is in the details.
Porting for better services, better coverage or reduction in premium is common, but ensure the new policy meets your healthcare needs. Sometimes, lower premiums may come with reduced coverage or longer waiting periods. Be cautious and make informed decisions to avoid regrettable pitfalls. For instance, both old and new policies may offer treatment abroad, but the new policy might have conditions like requiring diagnosis to occur in India. Such small changes in policy wording can lead to reduced premiums.
CONCLUSION
In our view it is necessary to carefully comparing the features of your old and new policies before making a decision. Awareness about porting policies needs to be increased. You should check the claim ratio of the company you are porting to. Proper porting requires giving complete details of your previous policy, illness history, and claim history. Disclosures at the time of taking the policy are not enough, you need to make fresh disclosures at the time of porting. You must be cautious because your insurance policy and benefits are on bet. These cons don't care about your health and wealth , they are in the market for earning commission and for business. There are various instances ,when data of policyholders are on sale at the time of renewal of insurance policy and insurance companies lured innocent customers with fake promises to provide lower premium/high sum insured and other benefits. Take informed decision before going for porting your existing insurance policy with other.
DISCLAIMER: The article presented here is only for sharing information with readers. The views expressed here are of personal nature, shall not be considered as professional advice. In case of necessity do consult with professionals.
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