After mobile numbers, it is time now for the health insurance policies to turn portable. Uptil now, only motor insurance policies enjoyed this benefit in the insurance industry. With its new set of guidelines, IRDA has finally kicked Health Insurance Portability in from OCT 1st this year. A much talked about phenomenon but scarcely understood! As is the literal meaning, your policies can now be carried/moved with ease from one insurance provider to the other. The system to share and transfer data of the policyholders is at last in place, clearing the deck for regulator, companies and customers to begin the process. Dissatisfied policyholders, for long, have had no choice but to stick to their existing insurance provider for the fear of losing benefits. They can now continue enjoying the existing benefits while relocating -
- Credit for the waiting period benefits accrued with the previous insurer for the pre-existing disease.
- No claim bonus carried forward.
- Possibility to convert from Group mediclaim, such as the one provided by the employer, to individual health policy. A year after such migration, transfer to any other non-life insurer.
All you have to do is apply to the new health insurer at least 45 days before the premium renewal date of the existing policy. This ensures that the new insurer has reasonable time to verify history of claims which shall be available on common database to all insurers. Strictly adhere to this rule, for the insurer will not be liable to offer portability if the policyholder fails to do so in the prescribed time. However, you can switch your health insurance policy to another insurer only if you have held the policy for a minimum of one year. It is important for everybody to be clear as to how the system will work as there are more than 50 companies who are engaged in health - which includes life, general and specialist health insurance companies. This step will not only help policyholders by giving them a wider choice and providing the insurance providers the impetus to focus more on customer value and engagement, but will also benefit the insurance industry in the long run by bringing in more transparency and allowing them to assess the risk and provide underwriting at the point of sales.
PROCESS : On receipt of application for portability, the new health insurer shall furnish the portability form along with proposal form and other relevant product details. The policyholder has to fill in all the forms and submit the same to the new insurer. Within 7 days of receipt of the completed portability and proposal form, the new insurer, if required, can ask the existing insurer additional information about the policyholder in the prescribed format. The existing insurer is bound to provide such data within 7 days of receipt of such request. Based on the information received, the new insurer shall decide to issue health cover to the policyholder. In case, the new insurer does not communicate its decision within 15 days, then it is assumed that the application has been accepted and later on it cannot reject such application.
Where on the date of renewal of existing insurance policy, the outcome of acceptance of portability is still pending with the new insurer:
- If requested by policyholder, the existing policy shall be allowed to be extended for a short period (at least one month) by accepting pro-rata premium for such period.
- The existing policy shall not be cancelled until such time a confirmed policy from new insurer is received or if otherwise instructed by the policyholder.
- The date of commencement of risk of the policy issued by new issuer shall match the date of expiry of the short period in such cases, and
- In case, for any reason, the policyholder subsequently chooses to continue the cover under existing insurer, it shall be allowed to continue by charging a regular premium and without imposing any new conditions.
Thus, it can be seen that ample safeguards are provided in the guidelines to ensure that the policyholder has adequate options and is not without cover at any point of time while the portability is in progress.
This move is expected to increase quality of services and encourage healthy competition among health insurance firms.
