Insurance Portability- Meaning, Advantages & Disadvantages

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Insurance portability is a great feature that allows policyholder to switch between insurers without having to start all over again.

Life insurance Portability
Life insurance Portability- Image Credit Istock

Reasons for Changing Insurance Provider

There are a variety of reasons why people may choose to change their insurance provider. Some of the most common reasons include:, pub-7431197127296523, DIRECT, f08c47fec0942fa0
  1. Cost: One of the most common reasons for switching insurance providers is cost. Many people are looking for ways to save money on their insurance premiums, and changing providers can be a great way to do that. By shopping around and comparing different providers, policyholders can often find a more affordable option that still meets their needs.
  2. Coverage: Another reason why people change insurance providers is that they are not satisfied with the coverage offered by their current provider. Policyholders may find that their current provider does not offer the coverage they need, or that their policy has too many exclusions or limitations. In these cases, switching providers can be a way to find a policy that more closely meets their needs.
  3. Service: Policyholders may also switch providers because they are not satisfied with the service they are receiving from their current provider. This can include issues with customer service, claims processing, or the handling of disputes. If a policyholder feels that their current provider is not meeting their needs in these areas, they may choose to switch to a provider that they believe will be more responsive and helpful.
  4. Group insurance: Employees may switch insurance providers because their employer has changed insurance providers or they have changed jobs. In such cases, employees can take advantage of the portability feature offered by group insurance policies and switch to the new insurance provider without losing their coverage.

These are the same reason where policyholder can use benefit of portability feature provided by many insurance provider.

What is Portability?

Portability in insurance refers to the ability of policyholders to transfer their insurance coverage from one provider to another without losing any of the benefits or coverage that they have accumulated. This feature is particularly useful for individuals who are looking to change insurance providers but do not want to lose the coverage that they have built up over time.

Portability in insurance is not just limited to individual policyholders but it also applies to group insurance policies as well. Group insurance policies are typically offered by employers to their employees and portability feature enables employees to switch employer without losing their insurance coverage.

So we can say that, portability in insurance is an important feature that allows policyholders to switch insurance providers without losing any of the coverage that they have accumulated. It provides flexibility and choice to policyholders and allows them to shop around for the best coverage at the best price. It also enables employees to switch employer without losing their insurance coverage.

Benefits of Portability

There are many benefits associated with portability in insurance.

  1. One of the main benefits of portability in insurance is that it allows policyholders to shop around for the best coverage at the best price without having to start over from scratch. For example, if a policyholder has built up a high level of coverage with their current provider, they can take that coverage with them when they switch to a new provider. This can save them a significant amount of money in the long run, as they will not have to pay for coverage that they have already accumulated.
  2. Another benefit of portability in insurance is that it allows policyholders to switch providers if they are not satisfied with the service they are receiving. For example, if a policyholder is not happy with the customer service they are receiving from their current provider, they can switch to a new provider without losing any of their coverage. This can be a valuable option for individuals who are not satisfied with the service they are receiving from their current provider.

Insurance Portability- Eligibility and Conditions

  1. Portability is allowed under all individual indemnity health insurance policies issued by General Insurers and Health Insurers including family floater policies.
  2. Every individual policyholder (including members under family floater policy) covered under an indemnity based individual health insurance policy is provided with an option of migration at the explicit option exercised by the policyholder.
  3. Every individual member, including family members covered under an indemnity based group health insurance policy is provided with option of migration at the time of exit from group or in the event of modification of the group policy (including the revision in the premium rates) or withdrawal of the group policy.
  4. Migration is applicable to the extent of the sum insured under the previous policy and the cumulative bonus, if any, acquired from the previous policies.
  5. Only the unexpired/residual waiting period not exceeding the applicable waiting period of the previous policy with respect to pre-existing diseases is applicable for migration under the new policy.
  6. If the policyholder is continuously covered in the previous policy without any break for a period of four years or more, migration will be allowed without subjecting the policyholder to any underwriting to the extent of the sum insured and the benefits available in the previous policy.

Also Read- EPF- Employee Provident Fund Explained

Insurance Portability- Timeline

  1. A policy holder desirous of migrating his/her policy should apply to the insurance company to migrate the policy along with all members of the family, if any, a tleast 30 days before the premium renewal date of his/her existing policy.
  2. If the insurer is willing to consider even less than 30 days period, then the insurer have to consider the application.
  3. The insurance company must convey its decision to the policy holder within 15 days as per Regulation 8(6) of IRDAI (Protection of Policy holders’ interests) Regulations 2017.

Insurance Portability- Steps to Apply

To port your health insurance, you should follow the steps mentioned below – 

  • Step 1: Request portability from the new insurance provider at least 45 days before the current policy is set to expire. 
  • Step 2: When the request for portability is received, the new insurer will offer a proposal, a portability form, and information on the various health insurance options. 
  • Step 3: Choose a health plan that meets your needs, then send the new insurer the completed proposal and portability documents. 
  • Step 4: In order to verify certain information, such as the applicant’s claim history, medical records, etc., the new insurance firm will contact the prior insurer after receiving the forms with the relevant information or visit the IRDAI website. 
  • Step 5: Within seven working days, the current insurer must provide all necessary information via the IRDAI’s common data-sharing system. The decision to approve the porting request may be delayed by the new insurer in the event that this information is shared later than expected. 
  • Step 6: Within 15 days of receiving all the information, the new insurer will determine whether to accept or reject the insurance. They will be forced to accept the portability application if a decision is not made within this time frame. 

Insurance Portability- Document Required

The following documents are required to port health insurance – 

  1. From previous insurer – The most recent renewal notice specifically mentions coverage continuity, if any claims have been made, documents such as a discharge summary and an investigation report, among others, Certificates of prior policies, and Policyholders’ self-declaration in no-claim situations. 
  2. From new insurer – duly filled portability form and duly filled proposal form. 

Insurance Portability- Reason of Rejection

If a portability application does not adhere to the terms, conditions, and policies of the insurance provider, it may be rejected by IRDAI. Applications for portability may also be denied for the following reasons: 

  • Poor claim history, for example, if several recent health claims have been made 
  • Insufficient information 
  • There are significant differences between the new policy’s inclusions, exclusions, and other aspects and the current policy. 
  • delayed submission of documents 

FAQ- Insurance Portability

Ques- Which policies are eligible for health portability?

Ans- Portability is applicable to all indemnity-based individual health insurance policies offered by general insurers and health insurers, including family floater policies. Additionally, indemnity-based group health insurance plans that banks offer to account holders permit the portability of benefits.

Ques- When can a policyholder use the portability option?

Ans- Only during the policy renewal process can a policyholder port their coverage. 

Ques- Is there an age limit at which a policyholder can request portability?

Ans- All holders of health insurance policies are eligible to use the portability option. 

Ques- When can health insurance coverage be ported?

Ans- A health insurance provider is required by the IRDAI to acknowledge a portability request within three days of receiving it. However, after obtaining all required paperwork, companies have 15 days to accept or decline a transfer request. They will have to agree to your request for portability if there is a delay. 

Ques- Can porting of health insurance be done online?

Ans- Yes, by going to the website of the new health insurance provider, you can move a health insurance policy there. 

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