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A health insurance policy is important and every person should have health insurance in their portfolio as it provides risk coverage against any medical emergency. The cost of hospitalization and medical expenses are ever-increasing and health insurance provides much-needed financial support.
When a person is paying an insurance premium it is in their interest to seek the best insurance policy and if they find out that some other insurer is providing better benefits they may decide to port their policy. The Insurance Regulatory and Development Authority of India (IRDAI) provides policyholders the right to shift their policy to another firm with the accumulated benefits.
The porting can be done for individual policies or even the family floater policies. The new insurance company that you decide to shift to has to cover you with the accumulated bonuses and the due waiting period. Once a person raises a request the existing insurance firm and the new company where you are going to port your policy have to complete the formalities according to the guidelines laid by the IRDAI.
It is not always necessary that the new insurance company will always comply with your request for porting. They may well decide to reject it and there would be reasons some of which are-
- Underwriting risk-
Underwriting risk is the risk of loss to the insurer that may arise due to faulty underwriting. When you switch to a new insurer, the portability request and a new application are alike which they have to access correctly. If the medical condition of the person is not aligning with the underwriting risk, the insurer may reject the application.
- Distorting medical information-
It is recommended to disclose the correct medical history to the new insurer. Non-disclosure or presenting incorrect information can lead to the rejection of the application. If there are differences between the medical conditions reported by a person as represented in the proposal form and those observed during the medical checkup, the insurer has every right to reject the application.
- Age Matters-
When an individual is quite senior in an age like above 70 years there is a high chance that the application request may be rejected. Below 70 years of age people still have chances but above 70 years the chances of rejection are very high. Here the insurance company applies very strict underwriting rules, charges a higher premium, and includes co-pay clauses.
- Other Conditions-
There may be a porting timeline that you have to comply with and if you don’t do it the application may be rejected. When you don’t present yourself for the medical check-up the insurer will not accept the porting request. All the required documents should be submitted according to the specified dates and the deadlines should not be missed.
Things to consider before porting health insurance policy-
There are certain things that you must consider before porting the health insurance policy.
- Before porting the policy check for the features, benefits, coverage, etc. offered by the new insurance firm. It makes sense to switch only if the features offered by the new insurer are better.
- Check if the insurer has network hospitals as a cashless facility is offered only at the network hospitals. An insurance firm that has a large number of empaneled hospitals is always advantageous for the convenience it offers during hospitalization.
- An important factor for porting can be the premium charged by the new insurer. Ensure that the low premium does not come at the cost of the coverage amount. The premium offered should be competitive with sufficient coverage to meet your needs; otherwise, you will end up paying more during the time of health emergency.
You can port the policy near the renewal period. Submit a written application to your insurer 45 days before the policy expiry date. The new insurer will provide you with the proposal form and once you submit the form they will check all the details like the medical history, claims, etc. Once they receive all the details the new insurer will frame the proposal and give it to you.