As a health insurance policyholder if you feel the need to switch from your current insurer to a new one, there is a provision for the same. The insurance regulator, IRDAI (Insurance Regulatory and Development Authority of India), has provisioned for such a transition. However, it is important to note that the insurer to whom you desire to switch is not obliged to accept your proposal. All portability proposals are treated as new and are put through the underwriting guidelines applicable per the policies of the insurer in question. Since underwriting involves measuring risk exposure and arriving at policy premium basis the determined risk, an insurer that has a lower appetite for risk could turn down your proposal to switch if the case does not hold business merit. In this article, we’ll discuss factors that could limit your insurance portability, some prerequisites for portability, and points to bear while deciding to switch from your current insurer.

Before we delve into the specifics of insurance portability, let us understand what portability entails. Simply put, portability means that the insured can change from insurer A to insurer B while retaining certain policy benefits. It is important to note that portability is applicable only to health insurance policies issued by non-life or general insurance companies . Here are some additional aspects that you should take note of:

  1. Only health insurance policies that are comparable can be ported.
  2. While there is no additional charge for porting, you will have to pay the premium applicable for the plan chosen by you – this could be higher with the new insurer than what you are paying currently.
  3. Most importantly, portability is not guaranteed. The insurer is well within their rights to decline the proposal if it does not meet their underwriting guidelines.
  4. If the insurer deems it necessary, they may request for additional documents/information within seven days of portability request being submitted.
  5. As mentioned earlier, only comparable policies are portable. However, the policy benefits may not be similar line to line in the new policy.
  6. Any No Claim Bonus (NCB) accumulated in the current policy will be lost when porting to a plan with another insurer.
  7. If your portability application is inadequate or incomplete, it could result in the application being rejected.
  8. Non-availability of previous policy documents could lead to application rejection.
  9. According to the portability guidelines, insurers have to be informed 45 days prior to the existing policy coming up for renewal. A portability request made with a time-frame shorter than that could be rejected.

There are certain basic prerequisites that one needs to comply with in order to proceed with a porting request:

  1. Policies can be ported at the time of renewal only. Therefore, it is important that you remember your policy’s date of renewal while keeping your current policy documents handy.
  2. The proposal for switching must be submitted at least 45 days prior to renewal.
  3. The policy must have been renewed without a break.

Factors that could limit your insurance portability:

There are certain factors that could limit or prevent your insurance portability. These include:

Age:

As a general rule, if the proposer is over the age of 45 years, they are required to undergo medical tests. It is important to recognize that while you may have been issued an insurance cover while you were younger, with age your coverage risks increases commensurately. Further, if you have developed a lifestyle disease such as diabetes or hypertension, then there is a greater chance that the insurer may not accept your application or accepts it while levying a high premium to cover for the associated risk.

Chronic Conditions:

It is important to note that while your current insurer cannot refuse to renew your policy on the grounds that you have developed a chronic ailment post commencement of the policy, the other insurer may reject your proposal without any regulatory obligation to do so.

Increase in Cover:

If you have proposed an increase in cover while switching your policy, the entire waiting period for pre-existing diseases will have to be served. For instance, you currently have a health cover for Rs.3 Lakh. You have been renewing the same continuously for the last four years. Now, you decide to port to another insurer with a higher cover of say Rs.5 Lakhs. On successfully switching to the new insurer, you will still have cover for Rs.3 Lakh for pre-existing diseases – while the enhanced cover of Rs.5 Lakh will be applicable otherwise. The additional Rs.2 Lakhs will become available after you have completed the waiting period stipulated by the new insurer for pre-existing diseases. As mentioned, for any other hospitalization, the entire sum of Rs.5 Lakhs will continue to be available.

While the regulator has created a provision for you to switch to a different insurer in the event you are not satisfied with the current insurer, there are several aspects that you will need to take into account besides the premium difference. Also, if you wish to, you can upgrade to a new plan offered by your current insurer.