Knowledge Centre

Medical Insurance Portability

Insurance Regulatory and Development Authority (IRDA), the apex regulator of the Insurance Industry released a circular giving guidelines on introduction of portability of medical insurance in India. Like the name suggests, this allows switching medical insurance policies from one insurer to another, without losing out on coverage due to exclusion. So, if a customer has a policy and wants to switch to another insurer after one year, he/she will be allowed to do so while retaining the benefit of carrying forward the awaiting period served. This is another milestone in the general insurance industry in India. Medical insurance portability is now a reality. It gives us another opportunity to make our financial planning better by being with the insurer who we think is the best. It means medical insurance companies improving their service levels, as they try to retain clients and entice clients from other insurers.

Before medical insurance portability, if you needed to move to a new medical insurance company, you would have to become a new customer for them and lose all the benefits that your existing medical insurance policy might have accumulated. While this is a great move forward for investors, make sure you do due diligence before changing your insurer. The premium amount you pay should not be the only reason for you to move.

Only individual and family floater medical insurance policies can be transferred over. Portability is applicable only to medical insurance policies that are issued by non-life insurance companies. The process to move to a new insurer needs to be initiated at least 45 days before the premium renewal date of current medical insurance policy. Maximum time within which new medical insurance provider can ask for more details from you is 7 days. Maximum time within which existing insurer provides information to new insurer is 7 days. Maximum time for new insurer to let you know of its decision is 15 days.

The new medical insurance company has the right to reject your request. Or accept it with an increased premium. When you transfer you will need to accept a different plan from the new company. Not all medical insurance policies are same and all of them offer something different, so make sure when you move, you read the policy wordings on your own to understand what you are signing up for. Remember that using medical insurance portability just because your premium is steep or because your  insurance company rejected your claims is not a wise idea. You should move only if the new policy is suitable for you.

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