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Understanding Health Insurance Portability

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Health insurance portability has finally come into force and has allowed the consumers to expect better quality services from the insurers. You can now change your Health Insurance provider without losing on the benefits acquired with the previous insurer. It has in a way forced the insurance companies to offer quality services and competitive pricing. So now, if you wish to change your health Insurer you can do so without losing on the benefits you gained with the previous employer.

Most health insurances are one year contracts that are renewed every year but with continued insurance one accumulates certain benefits that can now be carried on to the new health insurance provider. Some of the major benefits that come with portability are:

30 days Waiting Period is waived off at the time of renewal. When you first take the insurance there is a waiting period of 30 days after which insurance comes into effect. If it is Critical Illness Policy waiting period is 180 days. At the time of renewal, these waiting periods are waived off.

Previously if you changed the insurance company, it was considered a new policy and had all the waiting periods. With portability, it will be like a health insurance renewal, only, with a different company. Initial waiting period will be waived off.

No Claim Bonus – With continuous health insurance one accumulates No claim bonus generally in the form of increased sum assured.

When you change the insurance company, you lose the accumulated bonus but now, with portability, when you switch over to the other insurance company, the accumulated no claim bonus is also transferred.

Time bound Exclusions – There are certain time bound exclusions that is certain diseases are covered after continuing health insurance policy for one or two years.

When you switch the insurance provider, you don’t have to undergo this cooling off period again. Duration for which you were covered with the previous insurer is considered by the new insurer.

Pre-existing Illnesses – Pre existing illnesses are covered after a long waiting period of two to four years.

When you change the health insurer, the duration of insurance with the previous insurer is taken into consideration.

(All these are subject to conditions like your payment and claims history)

Portability from group to individual health insurance

A major benefit introduced in the portability clause is that if you are covered under a group insurance scheme by your employer, you can convert it to an individual policy with the same insurance company. The policy can then be transferred to another insurance company after one year.

Rest of the policy norms like premium, exclusions capping and sublimit on specific features, renew up to age etc are that of the new insurance company.

IRDA has specified that the request for portability must be received by the insurance company at least 45 days before the renewal date of the existing policy. This ensures ample time for both the insurance companies in evaluate and process the case. The customer needs to be informed about the decision in next 15 days time or there after the case will be considered accepted. If on the renewal date the decision is still pending, the customer will be allowed short Term health insurance without cancelling the existing policy.

With so many benefits introduced in health insurance portability, the customers are bound to benefit. Insurance companies will try to improve services to retain their customers and even coming up with new products to suit the new trend. If you are planning to go for portability, study the features of the other insurance companies and compare with your existing policy to be able to make an educated and informed choice.