July 12, 2017
IRDA allowed health insurance portability in July 2011.
Since then the number of health policies which have been ported is considerably small. As per the industry data only 1 lakh health policies in the financial year ended March 2017. The major proportion of such policies is of PSU insurers which were ported to private companies.
People want to port their policies for a number of reasons. One, they may have faced difficulties in the processing of the claim, they may not be happy with the features of their existing product or New products have come into the market that offer additional benefits.
Conversely, one of the main reasons for the low portability rate is that customers normally realize the need to port after a claim is made. Given that most claims are made because of lifestyle ailments, the new insurers approached may refuse to accept the policies offered because of the policyholders’ existing health conditions. Another reason is that agents are not remunerated for referring policyholders who wish to switch insurers.
As insurance experts we advice our clients to be aware of the product and its terms and conditions where he/she is interested in porting the policy. One needs to check the applicable waiting periods for coverage of pre-existing ailments, specific ailments, general exclusions, any co-pay /sublimates for ailment/ deductible applicable, in the new product before porting the policy.