Two years ago-

Mr. Dheeraj Kumar is 45 years old and has a medical insurance policy with a public sector general insurance company for the last 10 years. He has had a reasonably good health profile and has never made any health claim all these years.

Now, with the advent of new private sector health insurance companies offering superior features, benefits, service and flexibility, he is tempted to switch to one of them. On inquiry, he finds that if he does that, he would be treated as a new policy holder and would have to comply with the restrictions/exclusions on certain diseases like cataract or hernia for a certain period of time. Also the pre-existing diseases coverage will not be applicable, similar to any new policy. This discourages him, and he has no choice but to be stuck with the old health insurance provider despite poor service and uncompetitive features.

Fast forward to 01 October 2011-

Health insurance is now made fully portable. This new facility enables policy holders like Mr. Dheeraj Kumar to switch to another provider with all the continuity benefits – without the loss of pre-existing disease cover and the time bound exclusions on specific ailments.

Some points to keep in mind on portability –

• The new insurer will provide a health cover of not more than the base cover on  the existing policy.
• If an additional health cover is desired, the policy holder will be treated as a new policy holder for this additional amount and all the exclusions applicable to a new policy will apply.
• If the policy holder has accumulated a no-claim bonus on an existing policy in the form of increased cover, this additional cover will not get carried over on portability.
• Portability is applicable only to individual health policies, not group health policies.
• One has to approach the health insurer to which he/she wants to switch and fill up an application to port his old policy.

In conclusion –

The idea of health insurance portability is to give a choice to individuals to be able to switch to a better health policy conveniently without any losses. Make sure you do so only for this purpose, and not because some provider offers the same benefits for a lesser premium.