Portability is not always secure. In the event that the new insurance company is unwilling to transfer an existing plan, an additional policy may be considered to supplement the coverage.
Amid growing health uncertainties, having adequate health coverage has become a necessity for everyone. Since the Covid19 pandemic outbreak, health insurance awareness has increased. And a large number of people have subscribed to various health plans. However, there are times when policyholders are disappointed by the current policy or current insurance company by not providing the required coverage or desired support in times of need. Such situations force policyholders to look for another insurance plan or company with a better track record.
While the option to purchase a new plan is always available, not many know that, just like the transfer of mobile numbers, it is also possible to transfer the health insurance plan from one company to another. But is it advisable?
Experts suggest that you should always try to move your health insurance plan first rather than buy a new one.
“Try porting first, before considering buying a new one. The transfer provides continuity benefits in areas such as waiting periods and increases related to no-claim bonuses in the sum insured, ”Srinath Mukherji, co-founder of SANA Insurance Brokers, told FE Online.
However, it is important to note that migration is not always safe. In the event that the new insurance company is unwilling to transfer an existing plan, an additional policy may be considered to supplement the coverage.
“The transfer depends on the willingness of the new insurance company to transfer an existing policy and its underwriting conditions for the transfer (including the additional charge on the premium). If no insurer is willing to transfer the policy, or if the established underwriting conditions are excessive, consider purchasing a new additional policy to complement your coverage, ”said Mukherji.
“You can stop the old policy after the waiting periods for the new policy end. This could require paying higher premiums during waiting periods for both the existing plan and the new one, but the biggest advantage is that, in the meantime, you will remain protected against high hospital costs, “he added.
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Analyze the reason for portability
It is always recommended to transfer a previous health insurance policy in case you want to switch from one insurance to another. As mentioned above, when you transfer a health insurance policy, you can enjoy better product features, greater coverage, and better serviceability. The portability of the health insurance policy offers flexibility to the insured, since the processes are usually fluid.
However, experts say that before you carry a policy, it is important to analyze why you want to do so.
“Before doing portability or choosing a new policy, you need to analyze the reason for portability. Transferring a health insurance policy makes the most sense when you are not satisfied with the service of your current insurer, or there is a lack of transparency, or when you feel that the benefits do not match the requirements. However, it is suggested to do a thorough market research before and properly check the options of other market players. The main USP of portability is that you can get the benefit of continuity in terms of the waiting period for pre-existing conditions that you have accumulated in the previous policy ”, Aatur Thakkar, Co-founder and Director of Alliance Insurance Brokers.
Reasons to consider portability
There are several reasons why you should consider migrating to a new plan.
“When your current insurer does not offer you the desired support or adequate resolution to your problems, when your current insurer does not offer you sufficient coverage for specific medical problems, when there is no transparency or full disclosure about the coverage of the plan mentioned in the policy document , when you get better coverage / benefit plan options from another insurer and lastly, when your current insurer’s plans have higher premium rates with similar benefits to the other plan with comparatively lower premium rates ”, Rakesh Goyal, Director, Probus Insurance said.
“Other reasons for moving your current health plan could be if your current plan only offers coverage to individuals and you want to add your spouse to your plan after marriage, during job change or address change (in case there is no network hospital options in your new location). You should also make sure to read the policy documents carefully before migrating to another plan, as there is the possibility of transferring credits (for time-limited exclusions or pre-existing conditions) from your current plan to the new plan, ”he added.
Key points to consider before carrying out portability
Pre-existing diseases
Policyholders with pre-existing conditions (PED) should first verify if transfer to a new insurer is possible and if the insurer requires a pre-medical exam. Most new policies have a waiting period for PEDs of up to 4 years, during which the customer will not be able to claim any related expenses.
Portability, on the other hand, can occur with continuity benefits, that is, exemption from the waiting period already spent.
For example, if you have a policy that is 4 years old, your PED-related waiting periods on the existing plan should be mostly over. When you transfer this policy to a new one, the new insurer will not restart your waiting periods again. Instead, it will treat you as if you’ve already spent 4 years on the new policy. However, most insurance companies are hesitant to accept the transfer with PED as the risk of hospitalization is higher, Mukherji said.
Age at time of portability
Most insurance companies hesitate to sanction coverage for the elderly, given their delicate health conditions and the risks involved. For seniors who are unable to port their plan, it is recommended to consider purchasing a new add-on plan. It goes without saying that it is always best to carry or buy a policy when you are young.
Changes in the Sum Insured
“There may be cases in which the new insurer does not offer the exact sum insured as in the existing policy. In such cases, the insured would have to opt for the nearest higher sum insured and the differential amount would be treated as if it were a “new” application. This means that all the terms and conditions mentioned in the new plan (such as waiting periods, sub-limits, if any, etc.) would be applied to the differential amount, ”said Mukherji.
A higher sum insured would require meeting the medical and underwriting guidelines issued by the new insurer. Depending on the underwriting decision of the new insurance company, the application could be accepted at par or with an additional premium collection / copayment, or it could be rejected if the risk of insuring appears to be too high.
“The existing plan must be active at the time of transfer: the transfer process takes an average of 45 to 60 days to go into effect. Therefore, insured members should ensure that the transfer process starts well in advance, say 1-2 months before the renewal date, ”said Mukherji.
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