Has your health insurance premium shot up sharply in the past year or so? Or perhaps the claim took a long time to come through? If you are unhappy and feeling trapped with your existing insurer, you can move to a new company with some of your benefits intact. But does one grievance warrant shifting? Consider the triggers that should propel your search for a new insurer, and what it entails.
When should you move?
Firstly, remember that you can port only to a like policy. So, while you can shift to and from an individual plan to a family floater policy or a general insurer to a health insurer, you cannot move from an indemnity plan to a critical illness plan. Next, consider the reason you want to move.
Better product features: In the past few years, many new products with cost-effective features have come in the market. “Till only five years ago, the room rent sub-limit was 1%. Today, with Rs 5,000 room rent limit for a Rs 5 lakh cover, you will not be able to afford rooms that can cost Rs 20,000 a day,” says Amit Chabra, Head, Health Insurance, Policybazaar.com. Most of the new plans don’t have the room rent sub-limit and come with other benefits like restoration, OPD and mental illness covers, Covid-related equipment costs, among others. So if you have a policy that does not have these features and you are still paying a high premium, you could consider shifting.
Higher coverage: Today, a Rs 5 lakh cover will be insufficient for the high hopitalisation cost involved in Covid treatment for the entire family. “In some cases, the existing policy does not allow the insurer to increase the value of the policy,” says Rakesh Jain, CEO, Reliance General Insurance. Besides, you may have bought the policy several years ago when you were not married and did not have a family. To enhance the cover, it is a good option to move to an insurer who can provide a comprehensive, bigger cover at a reasonable cost.
Better serviceability: If your experience at the time of claim settlement, be it substantial deduction in claim amount or an inordinate delay, has been poor, or the company does not respond adequately to your queries during the free-look period or at any other time, feel free to move.
Low premium: Several insurers have raised the premiums in the recent past. While this could be a reason to shift, it should not be the only one. If it is combined with antiquated product features or poor servicing, consider shifting. “Do not move just because you want low premium. Make sure you are getting a superior product and better value proposition,” says Bhabatosh Mishra, Director, Underwriting, Products & Claims, Max Bupa Health Insurance.
Which benefits continue?
Upgrade to a policy keeping your future requirements in mind, but don’t forget the continuity of benefits.
Waiting period & sum insured: As per the Irdai guidelines, “Your new insurer has to give you the credit relating to waiting period for pre-existing conditions that you have gained with the old insurer, and has to insure you at least up to the sum insured under the old policy.”
There are three types of waiting periods: 30-day period when only accidents are covered; 1-2 year period for specified illnesses like hernia, cataract, etc.; and 4-year period for pre-existing disease like diabetes or hypertension. “If you have served three years in a policy, then in case of a pre-existing disease, three years of the four-year waiting period will be waived, and one year will have to be served,” says Chabra.
No claim bonus: The no-claim bonus (NCB) is not carried forward unless you enhance the sum insured. So if you have a Rs 5 lakh plan with a Rs 2 lakh no-claim bonus, and you opt for Rs 10 lakh sum insured, then the NCB is continued, but if you move to a Rs 5 lakh plan then the NCB will not be carried forward by the new insurer.
Can you be rejected?
You may want to move to a better insurer, but it is not necessary that your application will be accepted by the new insurer.
Underwriting risk: For the new insurer, there is no difference between a portability request and a new application. If the customer’s medical condition is not aligned with the underwriting risk or risk acceptance of the insurer, he can reject it.
Non-disclosure or falsifying: “If the medical condition listed by the customer in the proposal form does not align with his actual condition during the medical check-up, it can be rejected,” says Prasun Sikdar, MD & CEO, ManipalCigna Health Insurance. Similarly, if the claims history as revealed by the previous insurer is not the same as that mentioned in the form, the new insurer will reject it.
Age: If the customer does not fall within the age bracket specified in a particular plan, the application can be declined.
Technical grounds: If you do not adhere to the porting timeline, you can be rejected. “If the company calls you for a pre-policy medical check-up and you don’t respond to the calls, the claim can be rejected,” says Parag Ved, Executive Vice-President & Head, Consumer Lines at Tata AIG General Insurance.
How to port your health policy
Step 1: Start the porting process at least 45 days before the renewal of your existing policy. Research well before porting to the new policy.
Step 2: Fill in the Proposal Form and the Portability Form available with the new insurer. It will require your personal information, and medical history with pre-existing diseases and past claims.
Step 3: Submit the relevant documents, which can include:
- Filled in Proposal and Portability forms.
- Identity and residence proofs.
- Medical history, past claims and newly diagnosed disease, if any.
- Policy certificates of previous years.
- Latest notice of renewal listing coverage continuity and other details.
- Self-declaration in case of no claims.
- Investigation report, discharge summary and other documents in case of claims.
Step 4: The relevant data will be put up on the official portal of Irdai and the existing insurer will have to provide the information regarding your medical and claims history to the new insurer. This is why you don’t need to inform your existing insurer about porting as he will automatically know once it is put on Irdai portal and information is sought.
Step 5: After receiving all the details, the new insurer has to underwrite the proposal and inform the policyholder within 15 days. If it doesn’t, the policy is automatically considered to be accepted.
Step 6: There are no extra portability charges, only the premium, which can increase depending on the sum insured, medical condition and claims history. If you are above 45 years or have a medical condition, you will be required to undergo a pre-policy medical check-up.