The insurance regulator's notification under which an existing health insurance customer can move to another insurer with benefits from previous insurer being carried forward is in implementation from October 1, 2011.
So we bring to you the list of things you should know about these plans and take care when changing companies.
The edict by the regulator ensures coverage and time frame is continued, for example if a particular person is guaranteed a coverage of illness after three years and the person changes the insurer after two years then the new company will start covering the new customer after 1 year.
This feature of portability is only applicable to health insurance policies. Even from group mediclaim, one can more out to an individual health insurance policy or a family floater but this can be done only if the person has been with the company for more than a year. A very useful facility thing when changing jobs.
Also the policy requires that individuals should apply for portability 45 days prior to renewing the existing policy. For this the individuals will have to submit both a portability form along with the proposal form.
Then the details of the customer will be shared by your existing insurance company and the new one through a portal which will be maintained by the Insurance Regulatory Development Authority (Irda).
Once the information is shared, the new insurer will inform the individual about its decision within 15 days. Failure to inform within the stipulated time will mean that the insurer has accepted the individual as a new client.
On the flip side, the new insurer has every right to deny your plan if it is not available under its policy.
Just for the sake of simplicity, an example, suppose an insurance company has an entry age of 60 years to avail its policy but the policyholder which wants to change is 65 years old, then application for portability could be rejected.
Another example would be, if the new insurer's guideline dictates that the customer should pay a higher premium then it can inform the individual of it.
Supposedly if the response from the news insurer does not come by the renewal date of the existing policy then the person can extend it by paying the pro rata premium for a short period and ensure that the existing policy is not canceled.
Some important points
Make sure to read the fine print before taking up portability. There is a high possibility of three scenarios when it comes to changing the insurer.
First, the premium can increases even though the cover would be same as the initial insurer.
Second, the new insurance company may state that it covers a narrow set of health issues. To put it in simple terms, an insurance company ABC gives only Rs 1lakh as coverage and has 18 health issues in its list and the XYZ insurance company gives upto Rs 2 lakh but it will cover only 10 health issues. This can be a major problem for the individual.
Then the third problem can be that all the accumulated no-claim bonus of the individual may become null and void in case of portability. Suppose, you are paying a premium of 1,000 for a 1 lakh health plan.
Choose well and read the fine print, and you will get the chance to get stellar deals while porting from one insurer to another.
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