Health insurance to become portable from October 1….Deepak Yohanan
If you are not satisfied with current health insurer, you can switch to another with existing credits remaining intact
If you are not satisfied with current health insurer, you can switch to another with existing credits remaining intact
The insurance industry is abuzz with the announcement of Health Insurance Portability, which will be effective no later than October 1, 2011. Policyholders are also eagerly looking forward to the successful roll-out of health insurance portability. This is the first time that a portability option is being introduced in any insurance product in India. Once the portability law is implemented, then just like the mobile number portability, customers will be allowed to port their health insurance policy from one company to another.
What is portability?
Health insurance portability means the freedom to switch over to another health insurance provider from your existing health insurer, without losing any benefits or credits earned on your existing health insurance policy. The benefits that a policyholder primarily gets in a health insurance policy are a no-claim bonus for every claim free year and cover on pre-existing diseases (PED) after certain years of continuous renewal.
All health insurance policies have a specific waiting period on pre-existing diseases and conditions. This waiting period ranges from 11 months to 48 months. During this time frame, the insurance company is not liable to pay treatment expenses for any ailment already in existence at the time of taking the policy or prior to it. So for example, if a person has suffered from a heart attack or stroke before commencement of the policy and he suffers from stroke or any heart condition in the first 48 months of the policy, then the insurance company will not cover any medical expenses incurred for the same.
The current scene
Without the health insurance portability condition, if a policyholder wants to move to another health insurance provider then he would lose out on the credits earned on PEDs. This fear has always compelled policyholders to stay with the same insurance company. Once portability is implemented, the new insurance company will have to take into account this existing credit on PED.
The aim of health insurance portability is to improve the service standards of health insurance providers. Policyholders who are not happy with the coverage amount, policy benefits or service provided by their existing health insurer can now freely move to another health insurer with the same policy. The usual problems faced by customers in a health insurance policy are:
* Restrictions on age till which they can renew their policy
* Strict limits in their policy on hospital room rent, doctor’s fees, etc.
* Flexibility to increase coverage amount or family members
Before you switch…
Please remember these key points before switching:
1. Existing policy should be in force.
2. Portability has to be initiated by the policyholder well within the renewal date.
3. Do not change your health insurance provider just for the sake of doing it.
4. Do some basic research before switching to another company.
Author is CEO, MyInsuranceClub.com