Insurance thumbnail_Knowledge Series 6- Porting of Health Insurance

Amid rising health uncertainties, having adequate health cover has become a must for every individual. Since the outbreak of Covid19 pandemic, health insurance awareness has increased. And a large number of people have subscribed to various health plans. However, there are times when the current policy or the current insurance company disappoints policyholders by not providing required coverage or desired support in times of need. Such situations force policyholders to look for another plan or insurance company with a better track record. While the option of buying a new plan is always available, not many are aware that just like mobile number porting, it is possible to port health insurance plan from one company to another also.

One should always first try to port his/her health insurance plan instead of buying a new one.

Try porting first, before you consider buying a new one. Porting provides continuity benefits in areas such as waiting periods and no-claim bonus-related increases in sum insured. However, it is important to note that porting is not always certain. In case the new insurance company is not willing to port an existing plan, one may look at buying an additional policy to supplement coverage.“Porting depends on the willingness of the new insurance company to port an existing policy, and its underwriting conditions for porting (including additional loading on premium). If no insurer is willing to port the policy, or if the underwriting conditions laid down are excessive, then consider buying an additional new policy to supplement your coverage.

Analyze reason for porting:

It is always advised to port an old health insurance policy in case you want to switch from one insurance to another. As discussed above, when you port a health insurance policy you can enjoy better product features, higher coverage, better serviceability. Porting health insurance policy offers flexibility to policyholders as the processes are usually seamless. However, before porting a policy, it is important to analyse the reason as to why you want to do it.

Porting a health Insurance policy makes more sense; when you are not satisfied with your current insurer’s service,/ there is a lack of transparency,/ when you feel the benefits do not match the requirements,/ when you are getting better coverage/benefits plan options from other insurer,/when your current insurer’s plans are at the higher premium rates with the similar benefits as that of the other plan with comparatively lower premium rates,”(few other uncommon reasons could be like, if your current plan only offers coverage to individuals and you wish to add your spouse to your plan post-marriage, during change of job or change of address (in case of no better options of network hospitals in your new locality).

However, it is suggested to do thorough market research before and checking out the options properly from other market players. The major USP of porting is that you can get the continuity benefit in terms of the waiting period of pre-existing diseases which you have accumulated in the previous policy.

Key points to consider while Porting:

Policyholders with pre-existing diseases (PED) should first check whether porting to a new insurer is possible, and whether the insurer requires pre-medical screening. Most new policies have a waiting period for PEDs of up to 4 years, during which the customer will not be able to claim any related expenses. Porting, on the other hand, can happen with continuity benefits, i.e., waiver of waiting period already spent. For example, if you have a policy that is 4 years old, your PED-related waiting periods in the existing plan should be mostly over. When you port this policy into a new one, the new insurer will not restart your waiting periods again. Instead, it will treat you as though you have already spent 4 years in the new policy.

• Age at the time of porting

Most insurance companies are hesitant to sanction coverage for the aged, given their sensitive health conditions and the risks involved. For senior citizens who are unable to port their plan, it is recommended to consider buying an additional new plan. Needless to say, it is always better to port or buy a policy when you are young.

There could be instances where the new insurer might not offer the exact sum insured as in the existing policy. In such cases, the insured member would have to opt for the nearest higher sum insured amount, and the differential amount would be treated as though it were a “fresh” application. This means that all the terms and conditions mentioned in the new plan (such as waiting periods, sub-limits if any etc.) would apply to the differential amount. A higher sum insured would require meeting the underwriting and medical guidelines issued by the new insurer. Depending upon the new insurance company’s underwriting decision, the application could be accepted at par or with additional premium loading / co-payment, or it could be rejected if the risk of insuring appears to be too high.

• Existing plan should be active at the time of porting

The process of porting takes an average of 10-15 days, in case there is no complaxicity Hence, policy holder must ensure that the porting process is initiated well in advance, say 1 months before the renewal date.

Porting is not always certain. In case the new insurance company is not willing to port an existing plan, one may look at buying an additional policy to supplement coverage.

Call me, in case any clarity is required.