Check the terms and conditions before applying for portability

This year he was in for an unpleasant shock when his insurer raised the premium from R 7,690 to R 29,715 in spite of making zero claims on his insurance during the previous year. But Vaswani did not want to discontinue his policy as he had already completed three years, the period after which specific diseases, such as hernia, cataract, dysfunctional uterine bleeding, are covered. Also, he was just a year short of getting a cover for other pre-existing conditions. What could Vaswani do?

Vaswani did not have to worry much. The move by the Insurance Regulatory and Development Authority (IRDA) in October 2011 to introduce health insurance portability would prove to be a welcome change to people like Vaswani. You can carry over the pre-existing disease (PED) benefits in your previous policy to the new service provider under portability.

This move by the IRDA would not only ensure better customer service but also guarantee the need for insurance companies to broaden their existing product portfolios and introduce competitive products. Health insurance portability allows a policyholder to shift from one insurer to another without losing out on his accrued benefits such as no-claim bonus and waiting period for pre-existing diseases at the time of renewal.

However, all good things come with terms and conditions; and so does health insurance portability. One of the key issues that prevent policyholders from switching between insurance companies is the pre-existing disease cover. IRDA has directed that those issuing health insurance policies should allow for credit gained by the insured in terms of waiting period, for pre-existing conditions when he switches between insurers or insurance plans. However, this is applicable only if the previous policy was maintained without break.

The IRDA has ensured that the porting procedure is kept simple and that consumers can port between insurers with ease. However it takes a while before the policyholder can port and his new policy benefit can get effective; as he has to approach the new insurer 45 days prior to his existing policy renewal date. During this time, one should be aware of a few critical points.

The new insurer may not be liable to offer portability if policyholder fails to approach the new insurer at least 45 days before the premium renewal date.

It’s important to note that portability benefits are only restricted to waiver of pre-existing conditions and time bound exclusions on benefits that are common to both plans. If there is additional coverage being provided with the new insurance company, the waiting period for those additional benefits will apply.

Basis the underwriting guidelines

(specific to each company) and current health status and claims history, portability request may or may not be accepted by the insurance company.

Besides this, some of the other things that the customer should keep in mind while porting a policy are:

Claims servicing standards including cashless and reimbursement services

Wellness benefits like health related articles, a helpline number, discount offers on health specific products/ services

While choosing the right health insurance, one should also keep in mind additional benefits and services provided by the insurer as they add value to your policy.

We recommend that the policyholder should primarily port only if he/she is not happy with the services provided by the insurance company. This may include services at buying stage or during the policy term and even claims servicing stage. If the policyholder wishes to port, he has to understand and follow the guidelines closely and the new insurer’s policy coverage details. Lastly, an overriding factor to all product features, we feel, is the trust that the brand evokes in a customer.

— Author is MD & CEO, Tata AIG General Insurance