Things to know before switching your health insurance policy

Ankit Agrawal, chief executive officer and co-founder, InsuranceDekho.com, said, “Porting health insurance policies offers the policyholders flexibility. One may look for better cover, premium or services with another insurer ready to offer the benefits you are looking for from your health insurance policy.”

Portability also helps transfer the insured’s credit for pre-existing conditions and time-bound exclusions, provided the previous policy has been maintained without a break.

How it works: Once you decide to port your health policy, you are required to notify your new insurer at least 45-60 days before the existing policy expires. The new insurance company will ask you to fill a proposal for portability and to provide copies of the policy from the previous year. The new insurer will then connect with the existing insurer to enquire about your health and claims history. After gaining a thorough understanding, and considering the underwriting guidelines, the new insurer will accept or reject the proposal.

It generally takes 15 days, failing which it will become mandatory for a new insurer to accept the portability application made by the insured.

Sheenu Sehgal, vice-president and national head GI, Bajaj Capital Ltd, said, “A policyholder could face challenges in porting health policies if the expiring policy has a claim, documents presented are insufficient or the policyholder has a critical pre-existing medical condition.”

Besides, you should know that switching insurers has its own set of pros and cons. Let us look at some of the pros first.

Customization: You get an option to make necessary changes to your health insurance policy that suit your requirements at the time of porting.

Accumulated benefits: Portability allows you to transfer accumulated benefits such as no-claim bonus to the new policy. This means you will not be required to earn most of the rewards all over again.

Premium: Porting to a new insurance policy may help you gain financially as you may choose a policy with a more affordable premium than your existing health insurance policy.

Now, let us look at some disadvantages of health insurance portability.

Time-based: Health insurance portability is time-based, and you can only port to a new health insurance policy close to its time of renewal.

Change in policy not allowed: You may be able to switch from one health insurance policy to a similar policy or make some specific changes according to your requirement, but changing the entire policy is not allowed. For instance, you would not be able to switch to a critical illness policy from an individual health insurance policy.

Extra premium: You will be required to pay a higher premium if you choose a health insurance policy with greater benefits.

“You should thoroughly analyse your requirements before deciding to switch. Also, you must not forget to go through the coverage features, benefits, premiums, and compare similar plans online to make the best decision,” said Agrawal.

When to port: You must first analyse the reason why you want to port. The reasons can be many. For instance, compared with your existing insurer, another can have a broader network of hospitals or offer more affordable premiums with similar coverage benefits.

What you should do: Porting to new health insurance is better and helpful because health products nowadays are improving rapidly. The policy you purchased a decade ago is in all likelihood overpriced and outdated today. But you must also know that porting of a policy only adjusts waiting periods. You will still be bound by the premiums, benefits, exclusions and contracts offered by the new insurer

There are different health insurance providers, and one can always choose the best policy suitable for his/her needs. Portability comes into play when consumers want to avail of additional benefits and to maximize them.

Besides, poor service can also be one of the biggest reasons for policyholders looking for alternatives with better quality and accessibility.

“In case the current health insurance policy is not providing add-on covers, it is advisable to opt for an add-on cover. This will enhance coverage and improve benefits of the policy,” said Aatur Thakkar, co-founder and director at Alliance Insurance Brokers.

“Sometimes, hidden clauses in policies cause havoc during emergencies. These clauses are not clearly stated, or the consumer might not even be aware of its existence while buying the policy. Therefore, one should choose to shift to an insurer which is transparent in its policy documents,” said Thakkar.