Planning to port your health insurance plan? Here are some challenges you should be aware of

Time of India

4 hours ago

When Pune-based Diwan Varma's father had to be admitted to a hospital twice in quick succession, the insurer paid for the first hospitalisation and rejected the second claim, stating that it was for a pre-existing disease not disclosed earlier. While Varma was awarded the claim after escalating the issue to the
insurance
ombudsman in 2022, he was disillusioned enough to decide to shift to another health insurer.
Being frustrated with long claim settlement delays or poor service by your existing
health insurance
company may not be the only reason you would want to dump your health plan and opt for a new one. You could be stuck with a policy bought over 10 years ago that has a room rent sublimit, co-payment and a very low cover size, or perhaps you'd rather have a plan that offers restoration, OPD and day-care benefits.
'Insurers have introduced many new plans that are not only more affordable, but are also packed with innovative features tailored to evolving consumer needs. Around 64% of customers who opt to port their health insurance policies cite the pursuit of better coverage at similar or lower premiums as their primary reason, especially given the rising medical inflation in India,' says Siddharth Singhal, Head of Health Insurance at Policybazaar.
While it is a good idea to shift to a different plan for enhanced benefits, the transition may not always be the quick-fix solution you would expect. Here are some things to keep in mind before taking a decision to find a new health product and insurer.
Should you port or migrate your plan?
The first step is to know the difference between moving to a new product with the same insurer (migrating) and shifting to a different plan with a new insurer (porting). 'Deciding between migrating and porting depends entirely on your specific requirements, health needs and satisfaction with your current insurer,' says Pankaj Shahane, Head of Health Claims, Digit Insurance.
'Porting may be a better option when one is dissatisfied with the current insurer's claim service, network hospitals, policy features, or pricing structure,' says Bhaskar Nerurkar, Head, Health Administration Team, Bajaj Allianz General Insurance. One may want features such as wellness benefits, outpatient care, and access to newer or modern medical treatments.
Should you port or migrate?
Know the difference between the two to be able to take the right decision.
'Migration, on the other hand, is a convenient way to shift to another plan, especially when customers are satisfied with the current insurer and want to explore broader coverage,' says Priya Deshmukh, Head Health Products, Operation & Services, ICICI Lombard.
This type of transition to a new plan can also be smoother compared to porting due to the maintenance of continuity with the same health insurer. Migrating also comes with a typically lower risk of underwriting rejections.
Problems while porting
Porting does offer several benefits because, as per Irdai guidelines, continuity benefits such as waiting periods for pre-existing diseases and specific treatments are transferable. Any no-claim or cumulative bonus can also be credited to your new plan. However, there are hurdles you need to be aware of not only to avoid rejection of your proposal, but also to ensure a smoother transition to the new insurer.
Restrictive timeline:
A big limitation with porting is that you can shift only during the annual renewal of your existing policy, not mid-term. The window for doing this is at least 45 days before renewal and not before 60 days. So if you have just renewed your policy and realise its shortcomings or face a bad customer service experience, you will have to wait another year before switching your insurer.
Another big issue is that you cannot port if your policy has lapsed or does so during the process of porting. So make sure you start the process well before your policy's term ends because the evaluation, medical check-ups and underwriting may take a long time as it is similar to buying a fresh insurance plan.
Pros & cons of porting
Advantages
You can get an insurer with better claim and customer service, and hospital network.
You can get an upgraded plan with better features, fewer limits, and lower premium.
You can get a plan suited to your medical condition and health needs.
Waiting period for pre-existing diseases can be carried over.
Accrued benefits and bonus can be moved to new insurer.
Drawbacks
Underwriting risk is much higher and so is the risk of rejection.
You may have to pay a higher premium for better features.
You may not be able to get a much higher coverage, especially if you have a claim history.
You can move to a new insurer only at the time of renewal.
Loyalty discounts and rewards cannot be carried over to new insurer.
Underwriting:
One of the biggest hurdles while porting is the underwriting process. 'Underwriting usually involves a thorough review of the consumer's claim and medical history, which can impact policy issuance. So, if the applicant has a history of a heart condition, the new insurer may impose exclusions or a waiting period for specific diseases, increase the premium, or even decline the porting request,' says Indraneel Chatterjee, Co-founder & COO, RenewBuy. This is true even if a minor new condition, say borderline high cholesterol, is discovered during the medical check-up, since it could indicate a potentially bigger health problem.
'Before deciding to port your health plan, it's important to assess whether the new insurer's offering aligns both with your current as well as future healthcare needs.'
BHASKAR NERURKAR
HEAD, HEALTH ADMINISTRATION TEAM, BAJAJ ALLIANZ GENERAL INSURANCE
Higher cover limits:
If you had bought a basic medical plan before Covid and have a low cover of, say, Rs.3 lakh, you may want to secure a bigger cover. While it is possible to enhance your cover while porting, it may not always be a good idea. Even as the new insurer is bound to offer you a plan that is at least the same size as your existing cover, increasing the sum insured may not make it cost-effective for you. It may be better to opt for a top-up or super top-up plans, which offer a much higher coverage at a lower cost.
Secondly, the accrued benefits of waiting periods and no-claim bonus will be carried over only to the extent of your existing cover. 'If you had a sum insured of Rs.5 lakh in your old policy and choose to port to a new plan worth Rs.10 lakh, the benefits of the served waiting periods and accumulated no-claim bonus may apply only up to the Rs.5 lakh limit. For the additional Rs.5 lakh, new waiting periods or other terms of the new policy may apply as per the new insurer's guidelines,' explains Shahane.
Adds Chaterjee:
'No-claim bonus may not always be transferred directly; some insurers may adjust it in the new sum insured, while some might not. If the insurer does not adjust it, the consumer might need to start accumulating it from scratch.'
Loyalty rewards, other features:
While benefits like waiting periods for pre-existing diseases can be transferred during porting, any loyalty discounts offered by the insurer or features specific to your policy will not be shifted. So, if you bought the previous plan with a domiciliary hospitalisation benefit because of your specific medical condition, this feature will not be carried over to the new plan, and the policy you pick may or may not offer it as an inbuilt option.
Check before porting
Before switching insurers, make sure the new plan bridges the medical gaps and addresses the shortcomings in your existing policy. 'Evaluate key factors, such as the insurer's claim settlement ratio, premium affordability, customer service quality and co-payment or sub-limit clauses, and review exclusions or pending waiting periods in your current policy,' says Deshmukh.
Specific features:
While focusing on an affordable premium and crucial features, make sure the new plan has features specific to your ongoing medical condition or future requirements, say, maternity benefits if you are planning to start a family. 'It's important to assess whether the new insurer's offering aligns with both current and future healthcare needs,' agrees Nerurkar.
OPD & day-care benefits:
If you have a lifestyle disease or a family history of lifestyle or mental health illnesses, make sure you opt for the OPD benefit since you will use it more than the in-patient hospitalisation. This also covers dental treatments, teleconsultation, diagnostics and physical consultations. Besides, advanced technology means several treatments can be taken as day-care procedures, such as dialysis, chemotherapy, eye surgery, etc., instead of hospitalisation.
'Underwriting usually involves a review of the consumer's claim and medical history.... and the new insurer can impose exclusions, increase the premium or even decline the porting request."
INDRANEEL CHATTERJEE
CO-FOUNDER & COO,RENEWBUY
Restore benefit:
This is another feature that serves well due to the rising healthcare and surgery costs. It allows you to fully or partically recharge the sum insured if you exhaust your limit in a given year.
Claim settlement ratio:
Check whether the new insurer's claim settlement ratio is the same or better than that of your existing insurer as it reflects reliability and efficiency in settling claims.
Portability proposal can be rejected due to…
Underwriting risk
Since porting is like buying a new policy, it is subject to fresh underwriting and if your health condition, claim history, family's medical history or your age poses a significantly high risk for the new insurer, he has the right to refuse your proposal.
Non-disclosure
If you accidentally or deliberately fail to give information about a pre-existing illness or disease while filling the proposal form, and it shows up during the medical check-up by the new insurer, your proposal is likely to be rejected.
Policy differences
Portability is allowed only between similar policies. If you want to move from an indemnity plan to a critical illness policy, or from a group plan to an individual plan, the insurer may decline your request. Also, if you want high coverage compared to your existing plan, it can be denied as being an indicator of an impending health issue.
Previous cancellation
If there is a history of your previous policy being marked for cancellation or being cancelled for non-disclosure or attempt to misguide, the new insurer can decline your portability request.
Procedural issues
You are supposed to send in porting request at least 45 days before renewal. If there is a delay or if you submit documents with errors or incorrect information, the new insurer can deny your request.
Policy lapse
If your policy has lapsed or does so during the process of porting, your new insurer can reject the proposal. It can also be denied if your previous policy shows any renewal gaps in the past.