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Can an health insurance policy be ported to another company and also be renewed in existing company?

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21 Jul, 2021 by  Avinash Sonee

Can an health insurance policy be ported to another company and also be renewed in existing company?


Let's say I've an health insurance with New India for a SI of 2 lakhs which I've been paying since more than 5 years now. Since the benefits of New India plan are limited, I want to port to another insurance company (say Star Health or HDFC Ergo). But recently, I've diagnosed with hypertension and thyroid, so if I port the policy, there will be a waiting period for 3-4 years for these PEDs.


Option 1)

I'm planning to port the existing policy to new company (with waiting periods for PED) and I also want to continue to renew the existing policy (just in case any PED related problems occur). Is it possible and legit?


Option 2)

The other option is to continue renew the existing policy and also take a new policy with another company (with waiting periods for PED).


Please advise.

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21 Jul, 2021

Hey Avinash,


It is a very good question. Here's what I know-


Option 1

I have never tried or encouraged people to try to port (and they successfully do) and then renew existing policy (w. You've asked a question which may have a loophole. I don't know if existing insurer would ever know you have jumped the ship to another provider.


Option 2

This is the legit option.


If there is a PED, it doesn't stop you from porting policy. And since you've already been with existing insurer for 5 years, your wait period for all diseases is over (upto the sum insured in current policy). HOWEVER, you must disclose these medical conditions to the new insurer to whom you're trying to port.


The new insurer will assess the risk. They haven't taken your premiums for 5 years. So they don't have liability to give you policy. If they deem risk is low, they will take in the disclosure and port the policy. But if they find risk to be moderate to severe, they may decline to port the policy.


Either way, you have the failsafe of continuing with current insurer lifelong. In your example above, New India can never deny renewal of your policy upto 2 lakhs. Even if that plan is discontinued, they will have to move you to a new product. Lifelong renewability of 2 lakh SI in guaranteed to you with New India.


Happy to answer any followup question you may have.


Anuj

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21 Jul, 2021
Avinash Sonee
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21 Jul, 2021

Dear Avinash


Following are the conditions for porting as stated by IRDA ( Regulator of Insurance companies ):


”Conditions

  • You can port the policy only at the juncture of renewal. That is, the new insurance period will be with the new insurance company
  • Apart from the waiting period credit, all other terms of the new policy including the premium are at the discretion of the new insurance company
  • At least 45 days before your renewal is due you have to
  • Write to your old insurance company requesting a shift
  • Specify company to which you want to shift the policy
  • Renew your policy without a break (there is a 30 day grace period if porting is under process)”



Since you wish to port and renew at the same time. This case is clearly not possible as you have to inform your current insurer for Porting.


Option 2


I agree with Anuj’s view. Nothing more to add.

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21 Jul, 2021

Dear Avinash

You port a sum assured which you had bought earlier hence you can port as well as continue because you are increasing sum assured which is not legitimate .

As you have pre existing disease now hence recommrnd you to continue your old policy and buy a new plan with waiting period .

So go for option 2.

Shailesh

Insurance Samadhan

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21 Jul, 2021
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22 Jul, 2021

Hey Avinash


I am glad you asked this question in this forum. I have been asked similar questions by few of my contacts in the recent past. Even though we may be advising on Insurance masters for years we get these tricky questions from clients like the one you have got.


I will share my experience with regard to the porting of policy for my Mom about 4 years ago. She has hypertension and when the policy was issued by the insurer about 9 years ago there was a loading for hypertension. We tried to port out the policy to another insurer with an increased sum assured. The insurer with whom we were planning to port in declined the porting of policy from existing insurer considering PED. We renewed the old policy and have been continuing the policy with the existing insurer.

Considering this live example I would recommend trying to port out to new insurer with increased sum assured. If he accepts that fine else continue with existing policy and on top of that buy a new cover with deductible of say Rs. 2 Lakhs for the cover one has with the existing insurer.


Hope this addresses your concern.


Please do share your experience as to what eventually turns out in this case.


Cheers!

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22 Jul, 2021

Hi Avinash,


Option 1 is not possible - When you apply to an Insurer under IRDAI's health insurance portability regulations, the new Insurer writes to your existing Insurer and demands all pertinent records of your policy including claims data. Thus your existing Insurer is always in the loop. The policy issued by your new Insurer also explicitly mentions details of your previous policy & the insurer.


Even if you are able to make the renewal payment to your current insurer, the renewed policy will be null & void after the new Insurer issues your policy under porting. So don't attempt it.


Option 2 does sound feasible.


Regards

Asad Akbar

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