As You are aware that insurance has became need of every citizen, particularly health insurance. We have gone through deadly COVID-19 pandemic situation and still facing the same today also. This pandemic has taught many persons lesson, who did not believe the power of insurance. Insurance is a process or acts through which we transfer our financial loss to other entity called insurer (insurance companies) and the concept of insurance is based on concept of pooling from large number of person for the financial loss of some. It means that insurance companies collecting premium from a large number of persons and indemnifying some people who incurred loss during same period.
It is utmost important at to have a health insurance policy for yourself and your family. The policies may be chooses based your requirements and access event your future liabilities. Theses policies come into two parts ;1. Individual Policies 2. Family Floater Policies. In Individual Policies a person may choose separate insurance policy for each of his family members and in case of floater policies all family members enjoy same sum insured into a single policy. It is better to have separate policies for each member rather than one family floater policy.
The main activity of an insurance company is policy servicing, i.e., providing services to policyholder after soliciting insurance policy. An insurance company having well established Customer Service department, Grievance Redressal Policy and Claim Procedure System will earn a good reputation and loyalty of its customers. A good service and recognition of existing customers will improve chances of insurance company for better performance in this competitive industry. It is very important to retain your customers rather that exploding new business, because a satisfied customer will work as an agent without commission and induce some more people to purchase insurance coverage.
A dissatisfied customer from one insurance company has right to ‘ Port’ his/her existing insurance policies with other insurance company, subject to some terms and conditions.
Portability means the right accorded to an individual health insurance policy holder (including family cover) to transfer the credit gained by the insured for pre-existing conditions and time bound exclusions if the policyholder chooses to switch from one insurer to another insurer, provided the previous policy has been maintained without any break.
It means you don’t have to loose benefits earned in your insurance policy with your previous insurer,if you have changed or transfer your insurance policy with new insurer. In past if you port your insurance policies from one insurer to another then you have to loose some benefits such as Bonus, period covering “ Pre-existing disease” etc.,
Now IRDA protects you by giving you the right to port your policy to any other insurer of your choice. It has laid down that your new insurer “shall allow for credit gained by the insured for pre-existing condition (s) in terms of waiting period”.
This applies not only when you move from one insurer to another but also from one plan to another with the same insurer.
NOTE: it men’s that now you can move freely for porting your insurance policy from one insurer to another of your choice without losing benefits earned in your earlier insurance policy.
REGULATORY FRAMEWORK FOR PORTABILITY ;
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Regulation 17 of IRDAI (Health Insurance) Regulations, 2016 (as amended) deals with; Migration of health insurance policy (not applicable for Travel and Personal Accident policies) i). General insurers and health insurers offering indemnity based health covers shall offer an option to the policyholders to migrate to a suitable alternative health insurance policy available at the time of modification or withdrawal of the policy. Further, indemnity based health covers offered to specific age groups, students, children under family floater policies, shall also offer an option to such lives to migrate to a suitable alternative health insurance policy available at the specific exit age. Every policy migrated shall be allowed suitable credits for all the previous policy years, provided the policy has been maintained without a break. ii). Pilot products offered by general insurers and health insurers, may be guided by Regulation 11 (b) . iii). All health insurance policies issued by General and Health Insurers shall allow the portability of any policy in accordance with Schedule -1 of these Regulations. iv). Further to sub-regulation (i) to (iii) , the norms on migration and portability of all policies issued by general insurers and health insurers shall be subject to the guidelines as may be specified by the Authority from time to time. |
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| The IRDAI through Circular No. IRDAI/HLT/REG/CIR/003/01/2020 dated 01/01/2020 has issued Guidelines on Migration and Portability of Health Insurance Plans, which provides that ;
A. What type insurance covers are these guidelines applicable to? The IRDAI Migration and Portability guidelines are applicable to all Retail (Individual) and Group indemnity Health insurance products. The guidelines are applicable to both Individual sum insured and Family floater sum insured policies. B. What is Portability? IRDAI Definition: – “Portability means, the right accorded to individual health insurance policyholders (including all members under family cover) , to transfer the credit gained for pre- existing conditions and time bound exclusions, from one insurer to another insurer.” Which means any Individual health insurance policy holder has an option to port his/her policy to a similar health insurance product of another Insurer. • While doing so, insured will get continuity benefit for applicable waiting periods for the number of years the policy was continuously renewed with the previous Insurer. • The Cumulative Bonus (if any) will be accrued in the sum insured, if the insured opts for higher sum insured while porting the policy. However Cumulative Bonus will lapse if insured opts for same or lower sum insured. What are the conditions applicable for Portability? 1. The insured can only port the existing policy to a similar health indemnity policy of other insurer. 2. The continuity will be applicable to: o General waiting period. o Waiting periods for coverage of pre-existing conditions. o Any time bound exclusions (for example 2 year waiting periods for listed conditions in Health Total) . o The continuity for waiting periods will be applicable only up to the sum insured and cumulative of the previous policy. 3. The premium applicable would be for the enhanced sum insured (Sum Insured + Cumulative Bonus) and if the same is not available, to the next higher Sum Insured available if requested by the Insured Person. 4. The proposal acceptance is subject to the insurers underwriting guidelines as well as the perusal of pre-policy medical tests (if required) . C. What is Migration? IRDAI Definition: – “Migration means, the right accorded to health insurance policy holders (including all members under family cover and members of group health insurance policy) , to transfer the credit gained for pre-existing conditions and time bound exclusions, with the same insurer. Which means an insured having a health insurance policy has an option to shift his/her policy to a similar policy with the same Insurer. • An Individual Health Insurance Policy holder shall have option to shift to either a 1. Similar Individual health insurance policy. Or 2. to a Group Health Insurance Policy, provided the members meets the terms related to health insurance coverage of the group policy. • A member of Group Health Insurance policy can migrate to a similar Individual Health Insurance policy. However the same will be applicable in case: o Exit from Group Policy o Modification of Group Policy (including the revision in the premium rates) o Withdrawal of Group Policy • While doing so insured will get continuity benefit for applicable waiting periods for the number of years the existing policy was continuously renewed previously What are the conditions applicable for Migration? • For Individual policies if the policy holder has continuously renewed the previous policy without break for minimum 4 years, migration is allowed without any underwriting to the extent the sum insured and the benefits available in previous policy. However respective product underwriting guidelines will be applicable. • Migration from a Group Health Insurance policy to an Individual Health Insurance policy will be subject to underwriting. • Where underwriting is done the Insurance company has to inform its decision to the insured within 15 days of receiving the request. D. How to apply? Policyholder desirous of migrating his/her policy to a similar policy of same insurer has to apply to Us at least 30 days before the premium renewal date of his/her existing policy. PROCEDURE
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PLEASE NOTE THAT:
1. you have to apply for portability/migration well in advance before date of renewal of your insurance policy. In case of portability you have to apply with new insurer at least 45 days before the date of renewal of existing insurance policy with previous insurer.
2. During the period of 45 days the previous insurance company is liable for any loss you have incurred because you have paid the premium to previous insurance company for whole year or up to date of renewal. It means the period 45 days will be covered in your previous insurance policy and the new insurer is not liable for any loss incurred during period from the date of publication to the date of acceptance of proposal.
3. The new insurer has right to refuse your portability application on the basis of assessments of your risk profile. New insurer is not bound to accept your application, so you have to apply well in advance. Because after renewal date end your policy with existing insurer is also lapses and new insurer may also not accept your proposal in this case you do not have insurance cover.
SOME CONDITIONS ON WHICH NEW INSURER MAY REJECT YOUR APPLICATION;
1. Medical History-the new insurer can reject your application in case you have pre-existing diseases or disease which requires frequent hospital visits. If your age is over 45 years in this case insurer requires your medical test and if some pre-existing disease found in your medical report such as diabetes or high blood pressure or history of heart problem, renal failure,etc. then your application will be rejected.
2. Waiting Period Conditions- generally three types of waiting periods found in an insurance policy as follows;
i) 30 days from issue of policy date in case of fresh policies;
ii) 1 or 2 years in case of some diseases which are covered after a period of 1 or 2 years;
iii) 4 years from the date of insurance in case of diseases called “ Pre-existing diseases”.
In this case suppose you have three years old insurance policy and want to port with the new insurer with the same waiting period policy, then the conditions of 30 days and 1 0r two years will fulfilled but you have to wait 1 (one) year to cover your pre-existing disease to cover in the new insurance policy with new insurer.
3. Increase in sum insured –
i) generally people while applying for portability opt increase in sum-insured with the new insurer. The new insurer in this case may ask for reason or inquire the claim history of the insured.
ii) Please note that if you have a continuous policy of insurance for previous three years having sum insured Rs. 5.00 Lakhs and you want sum insured with new insurer of Rs. 7.00 lakhs. In this case the Sum Insured in the new policy will be Rs. 7.00 lakhs but portable interest will be not Rs. 5.00 Lakhs for any pre-existing disease. It means in case of hospitalisation for any pre-existing disease you will get only Rs. 5.00 lakhs and you have to wait for one year for Rs. 2.00 Lakhs under new policy.
4. Age of Insured- you know that age of an insured is also a matter for rejection of portability of an insurance policy. Since increasing health brought many diseases and for senior citizen insurers are reluctant to renew or accept portability application. The insurer may charge extra premium or loading.
5. It is important to check the premium you are going to pay to the new insurer. Because various people apply for portability due to lower premium in with new insurer. It is advisable to check the cover you are getting from new insurer against payment of lower premium. It might be possible that some cover will be removed without your knowledge by the new insurer and you have to expense more to cover those in future. So it is in your interest to study and take advise of insurance advisors and financial planners before jumping into portability.
6. It is better to follow IRDAI Guidelines and apply for portability in advance and utilise the period of 45 days as given to avoid rejection of your application.
CONCLUSION it is your right given by the regular i.e. IRDAI to port your insurance policy from one insurer to the choice of your insurer. But note that if you are young and have clear medical history then it is advisable to change or apply for portability and if your age is above 45 years and your medical history is not clean or your have any pre-existing disease, they there may be chance that your new insurer will reject your application. The new insurer is not bound to accept your portability application. Even portability application for new insurer is a fresh business and he will access the risk associated with you and acceptability will depend on discretion of insurer. It is advisable to check all details and pros & cons before applying for portability. One have to remember that during portability period you are insured with old insurer and not the new. Your coverage with new insurer will start from the date of acceptance of proposal by the new insurer. So act well in advance so that even in applicability period you do not loose your insurance coverage. Because once grace period in your old insurance policy expired you will loose insurance coverage in old insurance policy and your new insurer is also at dilemma to accept or not to accept your insurance policy.
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DISCLAIMER: the article produced here is only for knowledge and information of readers. The views expressed here are the personal views of the author. It is advisable for readers to go through mentioned Regulations / Guidelines for more clarification.
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