pays for your hospital bills for diagnostics, surgery etc.
In 2011, the Insurance Regulatory Development Authority (IRDA) implemented portability of health insurance. Under the portability provision individuals can switch from one's Health Insurance provider to another or from one Policy to another and in the process they do not lose the time credit they earned on account of Pre-existing disease and other time bound exclusions.
Insurance companies exclude coverage for pre-existing disease and certain other diseases for a fixed period of time from the date of buying a policy. Portability allows the Insured to carry forward time credit earned for being eligible for coverage of these diseases under the previous policy cover to the next policy they switch to.
However, portability is not as simple as it sound. You need to be aware of some important aspects while applying for portability.
1) Portability is valid for health insurance Indemnity policies issued by general insurance companies.
2) You need to apply for portability at least 45 days in advance from the expiry of your existing health plan.
3) The new Insurer is not bound to accept your application for portability. The new insurer will accept or reject the Proposal as per his underwriting policies. In most cases if you are aged above 45 years and plan for portability you will be required to undergo medical check-up. If you have a prior history of claims there is a distinct possibility that the new insurer will either not accept your proposal or ask for a significantly higher premium. However, the new insurance company has to either accept or reject the proposal within 15 days of receiving the portability application.
4) The insurance Premium for the new policy may vary and could even be higher.
5) The benefit of no-claim Bonus is lost. If you are eligible for no-claim bonus it will translate into an increase in sum assured. The new insurance company will charge you a premium in proportion to the new sum assured.
6) You are also eligible for portability if you upgrade to a new plan offered by the same insurer. Even employer group health policies can also be ported to an individual cover.
7) If you opt for a higher sum Assured under the new policy, the extent of cover available for pre-existing diseases or other diseases excluded under the previous policy will be limited to the Sum Assured under the previous policy. You will be eligible for new sum assured for pre-existing disease under the new policy only after you complete the waiting period mandated under the new policy.
8) The new health policy that you may purchase may have a different set of terms with regard to the capping of expenses and list of diseases covered or excluded. It is vital that you pay special attention so that you are not caught unaware.