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Health Insurance 427 views July 3, 2019
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Health insurance is a must these days, considering the rising pervasiveness of disorders and increasing vulnerability of people to health problems. With the increasing need for health insurance, the number of insurance companies in India selling health insurance policies has also gone up. Each health insurance plan comes with its own set of features with some of them promising more benefits than others at lower rates. Depending on needs and budgetary requirements, people opt for health insurance policies to offset the sudden burden of expenses made on hospitalization and consequent treatment. Healthcare costs are rising and may make a major dent in your savings, if not planned properly. Buying health insurance helps.
However, most customers are not satisfied with the plans they had opted and look to switch to another insurance company. Portability of health insurance allows them to opt for a different insurer without losing on the benefits accumulated from the current insurer till date. The guidelines laid down by the Insurance Regulatory Development Authority of India (IRDAI) clearly state “Your new insurer shall allow for credit gained by the insured for a pre-existing condition(s) in terms of the waiting period.” This means that moving on to a new health insurance company does not deprive the policyholder of benefits like the lesser waiting period for covering pre-existing disorders as promised under the previous health insurance plan.
The concept of health insurance portability was introduced by the IRDAI in 2011. To ensure health insurance portability to a new insurer, policyholders have to share their intent with their choice of the new health insurance company at least 45 days before the next premium renewal. The new insurer reserves the right to accept or reject any application requesting for portability to the new insurer.
There may be myriad reasons that prompt policyholders to switch from one health insurance company to the other. Some of them may include:-
One buys health insurance to offset the expenses that may arise owing to sudden hospitalization or urgent medical treatment. Opting for health insurance coverage early means that you exhaust the waiting period when relatively healthy. Choosing the right policy after considering necessary factors including the benefits involved, the extent of cover available, the number of hospitals in the network, premium charges, etc. is important. However, the insured may also consider the idea of switching to a new policy if they are dissatisfied with what they have currently. Like any other insurance product, there are certain guidelines that determine the working of health insurance portability. Some of these include:-
It is imperative that policyholders apply for portability at least 45 days before expiry or renewal date of the existing health insurance plan. However, it is not necessary that the new insurer would comply with the request. Depending on the nature and kind of risk involved coupled with other various factors, the new health insurer may decline the request for the proposal made.
When policyholders make a request for portability, the new insurer is liable to respond within 15 days of receiving the proposal. However, if the new insurance company takes more time to process the proposal, then there is a probability that the policyholders may miss out on paying towards premiums of their old policies. In such a scenario, it is the liability of the new insurance company to request your current insurance company to keep you covered for a month post expiry of the current policy. The current insurer then charges the premium on a pro rata basis.
The waiting period clause is one of the benefits that make the concept of health insurance portability so alluring. As per this clause, the policyholders can switch over to the benefits availed by the new insurance company without having to go through the initial cycle of waiting periods all over again. For example, many insurance companies necessitate a minimum waiting period of two years for pre-existing disorders like heart problems, kidney stones, and others. Policyholders having completed a year of the total waiting period will be required to wait only for another year before claiming the benefits of the new insurance policy bought.
No proposal for portability will be accepted if there is a break in the existing policy. To ensure policy continuity, it is important that you apply for portability prior to the expiry date of the current policy. Also, it is important that all policy documents are kept in order so as to avail some added benefits from the new insurance company.
There is no rocket science involved in applying for portability of your health insurance plan. However, there is a series of steps that interested policyholders need to follow to ensure easy and hassle-free health insurance portability. These may include:-
Step 1: Ensure that you apply to the new health insurance company for portability at least 45 days before your current policy expires.
Step 2: Policyholders after submitting the application for portability will be required to fill the portability and proposal forms forwarded by the new insurance company. It is important that policyholders ensure the accuracy and correctness of all the details filled to avoid any chance of rejection at the last minute.
Step 3: Pursuant to the policyholder submitting the application and the proposal form, the new insurance company will verify all details submitted with the insured’s existing insurance company. Normally, insurance companies do not take more than a week to check for the validity of the details submitted.
Step 4: The new insurer will now pass on the application and proposal details through the IRDAI’s site in the predetermined format for shifting the health insurance policy.
Step 5: Post receipt of the requisite information, the new insurance company frames the proposal keeping in mind its underwriting guidelines.
Step 6: Post 15 days of the application for the proposal made by the policyholder, the insurance company accepts or rejects the proposal for portability. However, if the insurance company is unable to respond to the proposal within 15 days, it will automatically be held liable to accept the request for portability.
Not all applications for portability may prove beneficial to the policyholder concerned. Since the minimum coverage amount differs across different health insurance companies in India, it is possible that policyholders end up spending a higher amount of premium in lieu of an increased amount of sum assured.
Also, the benefit of availing no-claim bonus (NCB) may prove futile in many cases. This is because of the enhanced sum assured amount. Since policyholders might be required to pay more premiums on the new health insurance plan bought, thus, losing out on the discounted premium benefits pursuant to the NCB advantage.
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