Posted:
Before IRDA passed regulation on Portability of Health Insurance policy on 10 th Feb 2011
Health a consumer was tied to his/her existing insurance company as he/she could not carry
forward any credit for the period of cover with present Insurance company .
Credits like time period spent reducing the limitation for coverage of pre-existing
conditions, cumulative bonus could not be carried forward to a new insurer.
Other than that if consumer is not happy with insurance companies on issues of:
A. Service
B. Coverage's
C. Limitations on expenses.
D. Ambiguity in No claim bonus
E. No facility to reinstate the sum insured.
F. Ambiguity on defining pre-existing conditions. And many more.
He used to lose all the credits accumulated if he changed the insurance company.
The options available with consumer were:
A. To continue with existing insurer
B. To buy new policy and lose credits for benefits which become active after waiting
period particularly on Coverage for pre-existing disease and cumulative bonus.
Some of the salient features for portability of health insurance policy as approved by
regulator are:
a. All insurance companies will allow for the credit gained for pre-existing condition in
terms of waiting period
b. The credit would be limited to SI and bonus incurred in existing policy.
c. All health insurance policies are portable.
d. Insurance company will not treat the policy as discontinued if because of delay in
taking decision on acceptability of portability takes existing policy beyond policy
period and shall allow portability.
e. Insured should initiate action to approach another insurer, to take advantage of
portability, well before the renewal date to avoid any break in the policy coverage
due to delays in acceptance of the proposal by the other insurer ( the standard
accepted time is 60-45 days)
f. Insurer have to share entire database of policy including claims against which
request of portability been made to its counterpart within 7 days of such request
being made.
But who should avail of portability and why?
Before thinking on portability a consumer should take an informed decision and should just
not depend on his agent to decide...
The major reasons for looking for portability are:
a. Customer Service Issue
b. Opaque claim process
c. Looking to enhance coverage and sum insured
For portability because of service issues decision can be taken easily but if the consumer is
looking for enhancing coverage's, sum; than he/she should rate his/her requirements and
reasons; the following parameters can be considered to take a decision on porting:
a. Age and financial planning
b. General conditions
c. Medical Risks and
d. Environmental conditions.
Age and Financial Planning :
Future financial planning depends on the age of the insured and what and where does he
looks himself on career progression and incremental in income in next few years.
Capacity to pay premium depends and should be mapped to the future earning and looking
at fluid job market where job satisfaction and long term attachment is not the motto so
capacity to pay premium should remain even when insured between the jobs or on bench
awaiting confirmation.
A decision taken in young age goes a long way in keeping future premiums manageable.
General conditions which need to be considered while deciding on Portability?
Location: a limitation of 1% on room rent on sum insured for 5 Lakh would get you services
in any super speciality hospital in Kerala but the same will get maximum shared room
services or general ward services in most metros.
Or
The insured plans to shift from smaller city to bigger or metro locations.
In the existing health insurance policy what is the definition of family and utilisation of
family floater sum insured?
1. Is SI divided among family members for example A SI of 5 lakh is divided as
3:1.5:0.75:0.75 among head of family: spouse: 2 dependent children.
2. Entire family can use SI of 5 lakh individually or collectively.
Limitation on Room rent, ICU rent, treatment cost or limitation on utilisation of SI.
Expected OOP (out of pocket) expenses and reimbursement of pre and post hospitalisation
and definition of pre and post hospitalisation.
What are the Medical Risks to be considered while deciding on portability of health
insurance policy?
A. family medical history for example is any one of the parent is Diabetic,
Hypertensive, cancer survivor or patient , early death of either parent, History of
Glaucoma etc etc then chances are the children may inherit family trait so reason to
port with increased SI is good decision.
B. Kind of job : does it require lot of travel, no discipline in food timings, late night or
over night shifts these are factors which increase the risk for diabetes, hypertension
in long term so to port with increased SI makes sense
C. Exercise and active life style decreases chances of catching lifestyle disease .
D. Desk job and very less movement and less exercise increases chances of catching
lifestyle disease hence its good to port policy with increased Sum insured.
Environmental Risks to be thought about before deciding on portability of health
insurance policies?
A. Location of residence is residential colony has neat surroundings or a case of
municipal / civic mismanagement , if it is case of municipal or civic mismanagement
chances off falling victim to seasonal disease is high then it makes sense to port
policy with increased SI.
B. What is the history of insurance company in handling seasonal outbreak of disease?
If the insurance company is pro-active in informing consumers on seasonal morbidity
and its preparedness to handle any outbreak it adds points in its favour.
C. Time taken to commute to work and does this commute takes place :
1. Self driven vehicle.
2. Public transport
3. Para transport like Auto or cycle rickshaw
a. If time taken to commute is more than 30 minutes in self driven vehicle it
adds to Morbidity in long term.
b. If person uses public transport for more than 80% of time chances are
morbidity to remain constant in long term.
D. Environment at Home can be divided into following :
a. Any long term illness in family.
b. Any history of mental illness like depression in family.
c. Financial health of family
d. Hours of sleep in night
i. Time to go to bed
ii. Time to rise
iii. If the sleeping time is less than 6 hours chances of increase morbidity
in long term.
E. Relation ship between spouse, parents and children :
a. A nagging and quarrelsome family increase morbidity factors in long terms.
F. Substance, Alcohol, Tobacco abuse increase morbidity rates in long term.
if answer to any of the points above is YES it shows a chance of increase in morbidity in long
term and it makes sense to look at porting the existing health insurance policy to a new
insurance company and policy :
A. With increased SI.
B. Minimum or No limitation on room rent, ICU rent and treatment costs.
C. Reinstate or restoring the Sum Insured option
D. Getting maximum benefits from credits accumulated on time period for pre-existing
disease or conditions and cumulative bonus.
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