Saturday, 15 October 2016

Importance Of Health Insurance Portability

Choice is always good. In a globalized world, the consumer has a plethora of choices in everything, from airlines to automobiles. This is why nowadays even airlines make an announcement after the passengers land: "We know you have a choice. Thanks for flying with us!"



It's rather simple. You have a choice - if you don't like the product or service, switch! The same goes for health insurance policies as well. In India, people have woken up to the promise of health insurance, which has led to a proliferation of health insurance providers across the board. Because of this wide variety available, the policyholder doesn't need to stick to an insurance provider if they feel dissatisfied with the services.

The Insurance Regulatory and Development Authority of India (IRDA) has a novel scheme for disgruntled policyholders to switch providers: health insurance portability. Now, what do we mean by this? Let's elaborate.

What is health insurance portability?

Health insurance portability is the manner through which a health insurance policyholder can transfer his/her existing policies from the current provider to a new one. Portability offers a way for customers to opt for better service and product. That way, an insurance provider cannot take them for granted.

Reasons for porting

When and why should you port a health insurance policy to a different provider? Here are some pointers to help you decide:

o Quality of Service

If you feel that the standards of service offered by a policyholder is not at par with what they promised while logging you in, may be it's time to move on. Often, an insurance provider will promise the moon while getting a customer on board in the eagerness of cracking a deal, but gradually, reality strikes and the customer realizes that it was all hogwash. There's no point continuing a bitter relationship, right?

o Increased Benefits

There might be a point when you realize the cover offered to you by your current health insurance provider is not sufficient, and after talking to them it seems clear that that's the best they can do. Under the circumstances, it may be wise to switch to a provider that can offer the additional cover/ benefits.

o Expensive

There is really no point in paying more for a service/ benefit that is available for a much lesser price with a competing provider. If you feel the competition offers a better product at lesser cost, it is time to make that switch.

o Specialization

Health insurance policies are offered by general insurance companies as well specialized health insurance providers. If it is felt that with the current provider, the attention is more on non-health policies, switching to a specialized health insurance company may suit your needs better.

o Relocation

When you relocate to a new city, you need to have the same services and cover as before. But your existing insurance provider may not have as better access or as many network hospitals in the city. It might then make sense to port to a provider who has those services in your city.

o Claim Settlement

This is important. Some companies take ages to clear a claim. Before you land up in such a situation, it's important to know whether your insurance provider has any such reputation. If that is the case, port out.

o Transparency

Often there are hidden clauses and conditions in the contract which the policyholder is not aware of. Such hidden clauses rear their ugly head during emergencies, and you do not know where to go. Time to move to a provider with more transparency in their dealings.

Now that we have a fair idea when to opt for portability, it is also important to know the benefits. What does a policyholder gain out of it? Well, here it goes:

Benefits of portability

Customization

While porting to a new provider, it becomes easier to customize the features to one's specific needs and requirements. You can add nominees, even go for additional cover or benefits.

Continuity Benefits

When you change your health insurance company, there is no reason to lose the benefits you had accrued with your previous provider. According to IRDA, your new insurer has to give you the benefits accumulated with previous insurer.

New Sum Insured

IRDA says your new insurer has to insure you at least up to the sum insured under the old policy. In most cases, the existing sum insured is added to the accrued bonus to give the new sum assured. The No Claim Bonus is also added to the new sum insured.

Better service, affordable premiums, transparency Portability takes care of the inconveniences associated with your earlier health insurer, owing to which you made the switch in the first place.

Yes, portability is a major advantage to those health insurance policyholders who are unhappy with their current insurance provider. But it's also important to know the conditions and criteria for portability to occur.

Conditions for portability

1. The policy can be ported only at the juncture of renewal. The new insurance period will be with the new company
2. Apart from waiting period credit, all the other terms of the new policy will be at the discretion of the new insurance company
3. The process has to be initiated by the policyholder at least 45 days before renewal:

o Write to your existing provider requesting a shift
o Specify the new insurer you want to shift your policy to
o Ensure that the policy is renewed without a break (there is a 30-day grace period if porting is under process)

In short, if you are disappointed with your health insurance policy, portability is a good option that offers a recourse - if the above conditions are met. Now, let's get into the most important part.

How to port?

Porting Process:

o Application for portability should be made at least 45 days before the renewal date of the existing policy, on the portability form
o The company will then send your portability form and all the policy related documents
o The new insurer will take a decision on accepting the policy within 15 days

Other documents include all previous policies, claim experience, proof of age and others. If any other documents are required, the new insurance company may ask for it.

... One more thing!

These are some small pointers that go a long way in ensuring that the transition is smooth and a happy one:

1. Read all the terms and conditions, product features, brochures of the new company before deciding
2. Do know that the new company can decide to hike the premium, at its discretion
3. Check the claim settlement ratio
4. Needless to say, check for good customer support and service


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