Things that must be kept in mind for a smooth insurance porting process

Recently, Mr. Rajesh Shanghvi, a 38-year old working professional thought of switching his 5-year-old health insurance policy as he was not quite happy with the services offered by his current insurer. And this is because, just few months back his daughter was hospitalised and the insurer didn't pay the full claim amount as there were sub-limits and co-pay attached with his policy about which he was totally unaware. His policy had a sub-limit on room rent of 5,000 per day and his daughter was hospitalised at a top hospital in Gurgaon, which had a room rent of Rs. 10,000. 

As per policy terms and conditions, half of the room rent and half of all the expenses were not paid by insurance company. Also, the various features offered under his health insurance plan were way less than the features of health insurance plans available with other insurers. He was totally convinced to switch his insurer however, had very little information about the porting process and what all continuity benefits will be passed on to him from the last policy.

Mr. Shanghvi is not the only one craving to switch his insurer. There are many like him who wish to change their insurer but are not sure about the porting process and benefits that will be offered. The fact is that though IRDAI made it public in the year 2011 that anyone can port their health insurer, were little information was made available about the entire porting process. You cannot port a policy as and when you like rather all porting requests are put through the underwriting guidelines and IRDAI gives every insurer the right to accept or reject a port-in request.

Another fact is that most of the health insurance companies are keen in insuring only young and healthy individuals as apparently the chances of young and healthy individuals making a claim are quite less. Many of the insurers hesitate or even at times do not accept policy portability requests from people who are old and in poor health conditions. Moreover, they attach numerous clauses and restrictions which are hard to beat and as a result people get discouraged and drop the entire idea of porting their health insurer. So, if you are also planning to port your health insurance policy anytime soon, there are numerous things that must be kept in mind for a smooth porting process.

The Underwriting Process

One of the most prominent reasons why people choose to port their health insurer is dissatisfaction with the quality of service offered. Most people wish to go for cashless claims rather than the reimbursement process which is long and tiring. Also, various sub-limits on different medical procedures, room rent, age caps for renewal and co-payment clauses are some major reasons why people look for porting options. However, it is not necessary that your health insurer will be ported just because you are dissatisfied with your current insurer. As a customer, it is quite important for you to know that when you request for porting, the application undergoes underwriting procedures, based on which the terms and conditions of the porting are decided. In case the new insurer finds your case unsuitable, the insurer has the right to reject your application.

Waiting Period

Each and every health insurance policy comes with a waiting period clause which usually consist of three timelines—30 days for fresh policies, up to two years for specified disease and up to four years for pre-existing diseases. Now, if you are planning to port your current health insurance policy to another insurer, make sure that you carefully give a consideration to the new insurer's waiting period. If you have already served waiting period with the previous insurer, it is not necessary that you have to again serve the waiting period. It is just in the case of higher sum insured, where you need to serve fresh waiting period to cover the pre-existing diseases. Though, the waiting period completely varies from one insurer to another and also from one plan to another.

Increase in Sum Insured

While applying for portability, you must seek an increase in the total sum insured mostly in case you have a family floater plan with limited sum insured. Though, increase in sum insured is totally in subject to acceptance by the insurer's underwriter. It is completely the insurer's prerogative to accept or reject the increase in sum insured request. While most insurers do not reject the request if the increase is justified i.e. up to 50 to 70 percent, requests demanding 100-200 per cent increase in the sum insured are mostly rejected. Also, the increase in sum insured majorly depends upon the claims made in the past. If the request is made for a claim-free policy, the chances of the request getting approved are quite high.

Features Offered

Always choose a health insurance policy that offers both hospitalization and day care procedures without any sub-limits. Remember that all the policies are different from each other and are governed by their underwriting principles. If not, look around and find one that offers all the possible benefits. Do remember that all the policies are different and are governed by their underwriting principles. Hence, you should choose the one you deem fit.

The writer is business head, health insurance, Policybazaar.com