National Insurance Awareness Day is celebrated on June 28 every year in India to review the country's existing insurance coverage. Insurance experts say that it is essential to have adequate health insurance to deal with the escalating expenses of healthcare in the country. While health insurance assures a person of monetary support during difficult times, at times policyholders can also have a bad experience with regards to their policy.
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In such cases, health insurance portability comes to the rescue. The Insurance Regulatory and Development Authority of India (IRDAI) introduced the concept of health insurance portability in 2011, following which if a person feels dissatisfied with his/her existing insurance policy due to high premium, claim-settlement, poor service, or any other issue, he/she can easily switch the policy to a new insurer without losing any policy tenure benefits.
This concept of portability has been a blessing for people with substandard policies and insurance companies. There are ample health insurance policy options available in the market when an individual considers porting and moving to another policy, Ashish Lath, Business Head at InsuranceDekho told CNBC-TV18.com.
When should one opt for porting?
According to Lath, a policyholder should, however, opt for porting only when the new policy offers attractive differential benefits and can solve health requirements that the existing policy is unable to fulfill.
"An individual can choose to port when they are not content with the services or claims payment from their current insurer. Among other benefits of health insurance porting, the existing policy bonus is added to the insured value of the new policy, which increases the current value of the new policy," he said.
According to Kishor Hadke, Claims Manager at Loop, choosing to port the insurance policy is primarily about considering one's requirements and the service quality of the current insurer.
The impact
All retail hospitalisation insurance policies come with restrictions where certain diseases or pre-existing conditions are covered after waiting periods of two to four years. Portability benefit allows the customer to change the current insurer to a new one without having to forego the waiting periods elapsed in the current policy.
However, there are certain disadvantages too. A policy can be ported only near the renewal date. There are chances that the insured might have to pay higher premiums to avail additional benefits. They may even lose certain benefits by moving from a family floater plan to an individual plan.
How to port?
In order to port a policy, policyholders are required to contact the new health insurance company at least 45-60 days before the expiry of the existing health insurance policy. They are then required to fill the proposal form and provide details of previous year policy copies. The new insurance company will connect for further process.
The new insurer is required to insure the policyholder at least up to the sum insured under the old policy.
How advisable it is?
While portability is a beneficial feature provided by insurance companies, experts say one should not misuse it. A person should opt for it only when he/she is not satisfied with the current insurance company because of a genuine case or coverage or when features being offered in another product are of more personal value.
Is porting better than renewing health insurance?
As per Hadke, porting may be beneficial if consumers are not satisfied with the current insurance provider, the coverage isn't enough, or the premiums are too high.
"However, renewing with the existing insurer could be more suitable if they are happy with the service, coverage, and costs. It's essential to weigh the pros and cons of both options before making a decision," he said.
Do customers actually go for porting?
Yes, customers do opt for porting, though there is no comprehensive data available to quantify the extent to which porting is used.
"While some people switch for better features or cost-effective plans, others may be driven by improved customer service or faster claim settlement ratios. It is a useful feature offered to policyholders, enabling them to seek better alternatives without losing the benefits of the existing policy," Hadke said.
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