Saturday, October 1, 2011


After stupendous success of mobile number portability introduced by TRAI , IRDA too has taken a cue and introduced health insurance portability in India from 1st October 2011. This is a huge step in the right direction considering there was lot of discontentment among the consumers about the manner in which they were being treated by their health insurers. Some of the common grouses were:

1. The health insurance companies mandated on a waiting period for covering pre existing diseases to each and every customer once he comes in their fold, irrespective of whether or not the person had any other policy where he had served out the waiting period. So in effect , every time you changed the company , you would have had to start the waiting period all over again.
2. The insurers generally were resorting to increasing the renewal premium by a steep margin for those policyholders who have had a claim in the year. This was mostly done to discourage the policyholders from renewing the policy with them. Thus they wanted to get rid of policyholders who they thought could be "claim prone".
3.In lot of cases, policyholder's request for renewal after a claim was rejected without any material reason from the insurer. This meant a great nuisance for the policyholder since he had to start his waiting period for preexisting disease all over again with the new insurer.

To address some of these issues , IRDA has mandated health insurance portability now. What exactly does it mean?
Health Insurance Portability means that a health insurance policyholder can now choose to change his insurance provider without foregoing any of the benefits covered in his/her current policy. For instance, if you have a health insurance/mediclaim plan from ICICI Lombard and if for any reason you are not happy with the company , then you can change over to any other insurance provider without foregoing any benefit that you may be enjoying under your current plan. 
What are the benefits of Health Insurance Portability? Following are the few of the benefits:
1. CHOICE - Now as a policyholder , you will have a choice which till now you didn't have. You can now switch over to any health insurance provider . 
2. COVERAGE OF PREEXISTING DISEASES - Once you move from one general insurance company to another for their health insurance or mediclaim plan, you will continue to get the same benefit that you got in your old plan.For example , if you were covered for Diabetes in Plan A and then you  migrated to Plan B , then in the Plan B too , you will have that covered. 
3. NO FRESH WAITING PERIOD - Once you change over to new insurance provider, you need not start your waiting period for getting preexisting diseases covered all over again. You will have the benefit of counting the number of years you waited in your earlier plan .For example, if the waiting period for covering Diabetes under the Plan A is 4 years and after 2 years you migrated to Plan B from another company where also the waiting period for covering Diabetes is 4 years, then you will have to serve waiting period of only 2 years with Plan B since you have already served 2 years under Plan A. This is a big change for all the policyholders.
4. NO CLAIM BONUS TOO TO BE PAID - If you had claim free year in your first policy , then on switching over to new policy , you will be entitled to no claim bonus too from the new insurance provider .

How to Change the Policy or Insurance Provider in India?

You will have to do following :-
1. Apply with the insurance company you wish to change to , at least 45 days prior to your current policy getting over.
2. Inform the IRDA too about the insurance firm you wish to change to.

What else should you consider before switching over?
Consider the following before you finally sign on the switch application 
a. Check for the new premium rates being charged by the other insurance companies for similar coverage in terms of Sum assured and diseases covered.
b. Check for the network of hospitals that they have under cashless scheme.The more the merrier.
c.Also check claim settlement ratio of the firms. The company which doesn't have good record in settling the claims does not merit a chance. 
You should go with the firm which has good claim settlement ration, great hospital network and reasonable premium.
So its time to pull out your mediclaim policy documents and check if it needs to be from another company .

Stay wise and happy investing!!

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