Wednesday, 6 February 2013

What is PORTABILITY (Health Insurance)


1.  Recently (in Jan 2013) there were news reported that there will be 20 to 30% of increase in premium, and will be done by all the PSU Health Insurance Service provider. This will lead to people opting for this facility, as premium is criteria on which majority of people buy insurance rather than the service provided.

2.  Although above may happen or not, or whenever it may happen.. Many of the people are not aware about this facility availability and there is lot to be educated in this matter before we opt for this facility. Here we are going to specific on this point only with respect to Health Insurance and not other Insurance. The motive of this post is to give you overview on how things work and give you basic understanding and guidance on this topic & how to proceed and why and when to proceed. As today it might be case of PSU Insurance companies tomorrow it might be of other insurance companies too.

(Note: Do take advice from professional if you are not comfortable in understanding this )

Portability: Word itself defines what it is… Many of you might have used this service in telecom sector. Same implies here too. What does it actually states in respect to health  insurance  is this…

Portabiity means the right accorded to an individual health insurance policyholder (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 of from one plan to another plan of the same insurer, provided the previous policy has been maintained without any break.”

YES HEALTH INSURANCE HAS PORTABILITY and one must be exited to know on this completely as it may help you any time. 9th September 2011 is the date on which IRDA (Insurance Regulatory Development Authority)  have given guidelines and which was introduce this service feature on 1st October 2011, which we feel is a welcome step and must be highly appreciated by everyone, As this brings indirect pressure on companies to maintain and achieve good level of service they provide while issuing mediclaim policy they are authorized to give with the terms and condition they maintain.

In recent past when an Health Insurance company increased it premium rate suddenly, many of the people did use this option later on after it was introduce, However we do not recommend to use this feature just because premium of one company is less than what you have. We strongly advocate to look at overall features, and consider all the aspect of portability and service you will get in return before opting for this option.

Obviously this is a tool which one should not hesitate to use if you are getting good benefits without effecting the existing services you have got or are not satisfied with the your insurance company service policy condition.

Couple of points for reference and to be made a note of for getting basic requirement and understanding on it (There is lots to know in detail on this, do contact us if you wish to know more on it)

1)  Applicable to only Health Insurance Policy issued by Non-Life Insurance Policy (Life Insurance companies Health Insurance is not included)

2) Process need to be initiated 45 days before the premium renewal date, so that smooth transfer is processed (Although New Company can accept it even 7 days before.. That differs from company to company and by case to case basis. )

3) Applicable to only Individual and Family Floater Insurance Policy. (others policy are not covered)

4) Maximum time New Insurance Company can ask for more information from you incase no information received from other source is 7 working days.

5) Maximum time New Insurance Company can take to know its decision of not accepting the policy is 15 working days. After which they have to accept the policy if all details are provided.

6) Now the Most IMPORTANT QUESTION.. What if New Company does not accepts my proposal.? Will or CAN An Old Company Deny to renew the existing policy.

Not a worry, Guidelines clearly states in point 3.3.4 “if for any reason the insured intends to continue the policy further with the existing insurer, it shall be allowed to continue by charging a regular premium and without imposing any new condition.”

7) Last but not the least always check for the accrue benefits are stayed intact which your new policy issued by the new company which you have accumulated over the period of time on your old policy this is one of the key point which must be noted before switching.

Many of the company do not consider the benefits accumulated also note the premium will charged as per their company policy which they charge to other and not your existing one which do differ from company to company. Take your decision which suits you best.


It as simple as usual process like applying for a fresh policy in a company of your choice, You just have to attach a Portability Form and the details of the past policy history which you have maintained proving that there is no break in the previous policy and other information which new company may ask for while you are looking for portability from other company.

Generally it is seen it will give benefits to younger group of people below the age of 45 to 50 but again, things may and can differ from case to case.

Thanks for understanding. Do post your comments and Question for any details you may require.

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