Health insurance portability is a valuable option for policyholders looking to switch insurers while retaining the benefits of their existing plans, such as waiting periods and no-claim bonus.
However, the process requires careful attention to avoid errors that can lead to rejection, coverage lapses, or the loss of accrued benefits. This blog highlights the top common mistakes individuals make during health insurance portability and provides tips to avoid them for a smooth transition.
Understanding Health Insurance Portability
Portability allows policyholders to transfer their health insurance coverage from one insurer to another at the time of policy renewal without losing continuity benefits. Insurance Regulatory and Development Authority of India (IRDAI) governs this option, and it must occur during a specific renewal window.
If done correctly, portability can improve coverage, lower premiums, and provide superior services. For those seeking comprehensive health insurance, portability ensures that existing benefits are preserved while gaining access to enhanced features. However, mishandling the process can expose insured individuals to serious risks.
What are the Most Common Mistakes to Avoid During Portability?
Here are some of the common mistakes you need to avoid during health insurance portability:
- Missing the Portability Window and Timing
One of the biggest errors is delaying the portability request past the allowed time frame. As per the recent IRDAI guidelines, insurance companies must request portability within 45 to 60 days before the current policy expires. Missing this window means losing portability rights entirely and having to start fresh with a new policy that will not carry over prior benefits.
Additionally, the policyholders cannot port mid-term, only at renewal. If you attempt to switch outside this window, or after the policy, it can lead to rejection or loss of coverage.
- Not Reviewing Existing Policy Limitations Thoroughly
New insurance companies may offer attractive features or lower premiums, but it is critical to compare the old and new policy terms closely. These are some concerns you need to inspect before including coverage differences in treatments, hospital networks, or sub-limits.
Major health insurance policies include waiting periods for specific diseases or benefits. If you fail to identify what is beneficial, you may lose out, which can result in underinsurance or higher costs.
- Incomplete or Incorrect Disclosure of Medical and Claim History
Honesty is the key aspect of health insurance portability. Any misinformation or omission on your health conditions or prior claims can lead to rejection or cancellation in later stages.
The new insurer will conduct underwriting, which involves examining claim history and medical records. Accurate and complete disclosure prevents unexpected issues during claim settlement.
- Assuming All Waiting Periods are Waived
Portability allows the carry-over of waiting periods for pre-existing conditions under the older policy but does not waive waiting periods for newly acquired benefits or coverage enhancements.
If the new plan offers maternity benefits, which are not included in the previous plan, a fresh waiting period may apply for that. This is done on the assumption that a full waiver can create costly misunderstandings.
- Opting for Higher Coverage Without Strategic Planning
While increasing the sum insured is often desirable, porting with a significantly higher coverage than the existing plan could result in a fresh waiting period and underwriting challenges.
Additionally, benefits like no-claim bonuses typically transfer only up to the previous sum insured limit, and for coverage beyond that resets the waiting period.
- Cancelling Current Policy Prematurely
You should never cancel your existing health insurance policy before the new insurer formally accepts the portability request. Early cancellation may leave you uninsured if the new insurer rejects or modifies your proposal due to underwriting results.
In any case of rejection, wait for official confirmation to ensure continuous coverage from the new insurer. As it can affect your health insurance portability.
- Failing to Verify Policy Compatibility
Insurance companies allow portability only from one similar indemnity-based health insurance plan to another indemnity plan. If you try to port from a group policy to an individual policy, you may face rejection.
Always ensure that your new plan matches the basic terms and conditions of the previously existing policy for profitability.
- Overlooking Documentation and Procedural Accuracy
Any kind of errors in the application forms and delays in submitting portability requests can lead to rejections or delays. Complete paperwork carefully and double-check details before submitting your insurance policy.
Always use official insurer portals or seek expert help in case of any uncertainty. Try to check all the health insurance portability rules before applying.
Final Words
Health insurance portability can be a powerful tool for enhancing coverage, lowering costs, and improving service quality. However, common mistakes can jeopardise your health protection and lead to financial stress. These include missing the portability window, premature policy cancellation, and incomplete disclosures.
