The last time you made a claim through your health insurance policy, you came dissatisfied with the services of your insurer. So, do you have the option of changing your insurer, but not at your own cost? The answer—as things stand today—is “no”. Changing your health insurer would mean buying a separate policy, which in turn could mean once again going through medical tests, serving the waiting period or even see a disease that your earlier insurer covered getting labelled as a pre-existing disease by the new insurer.
The insurance industry seeks to address this problem in about three months from now. The industry is working on a standard health insurance product that will be portable across insurers. For you, it will mean that you can switch insurers at no extra cost, keeping all the benefits you already have intact.
Says S.L. Mohan, secretary general, General Insurance Council (GIC): “We are working on a product that will have standard features. So, a customer will be able to shift from one insurer to another at the time of renewal without undergoing any fresh application or medical tests.”
How will it work?
If you want to make your policies portable, you will have to buy specific portable products. If you go for a regular health insurance policy and then want to change, you will have to start the process of buying health insurance afresh. This would broadly entail going through a medical test, waiting for 30 days before making a claim, waiting for four years to make a claim for the treatment of any complications arising from a pre-existing ailment (such as diabetes or hypertension) and doing away with benefits, such as no-claim bonus—you get a bump up in your sum insured for every no claim year.
Says Antony Jacob, CEO, Co. Ltd: “Portability benefits would surely cater to the needs of first-time buyers. Individuals looking for flexibility to lower their sum insured would find it a feasible option. However, insured individuals looking for a higher sum insured and more comprehensive coverage would for a preferred insurance plan from the company of his choice.”
Where is the problem
At present, a basic health policy has three distinctive features—hospitalization cover, pre- and post-hospitalization benefits and disease-specific exclusion. Insurers innovate around these features and add variety, so there is no standard product as such.
While one policy may cover you only up to a month after hospitalization, another may cover you for two months. Even the hospitalization cover is packaged uniquely by every insurer. Some policies may have sub-limits, while others may give a blanket cover.
Says Sanjay Datta, head (customer service—health and accident), ICICI Lombard General Insurance Ltd: “Portability is difficult among products which are not standardized. Even among the basic health insurance policy, insurers have different features, which can’t be transferred to the new policy.”
Portability at present
As of now, portability doesn’t exist. However, few companies may carry forward some of the benefits, such as no-claim bonus, earned with the previous insurer.
For instance, if you have a health insurance and want to switch to Apollo Munich, it will carry forward 20% of your no-claim bonus. It waives off the 30-day waiting period and even reduces your waiting period on any pre-existing ailment to the extent you have waited in your previous policy. So, if you have waited for two years out of the total four with your previous policy, your waiting period with Apollo Munich will only be two years. However, if you have waited all four years in your previous policy, you will still have to wait for a year with Apollo Munich.
What are your options
At present, if you want to change your insurer, your only recourse is to buy a new policy. The only saving grace is that you get a refund on your policy if you leave it midway.
Says Datta: “A policyholder gets a refund if he wants to discontinue midway. But the refund happens only if the exit is during the initial part of the year. Typically, after nine months of the policy being in operation, refunds are difficult to get.”
The other option is to bump up your cover through a new insurer and manage two policies. So while you stand insured from the first one, you can eventually enjoy the benefits of the second policy after the waiting period gets over.
But even if you have a bigger sum insured, you can claim only as much as your expenses. You can invoke both policies to cover the expenses incurred and nothing more.
Even after portability becomes a reality, you will not have the room to port your existing policies. To enjoy the facility, you will have to buy new portable policies which may have low sums insured.
However, GIC is considering a proposal to allow portability of no-claim bonus across all health insurance policies. Says Mohan: “To begin with, a portable policy will have a sum insured of Rs1 lakh and Rs2 lakh. We may review this and increase the sum insured later. We could also come up with portability of no-claim bonus across insurers for all kinds of health insurance policy.” The proposals will finally need the seal of the Insurance Regulatory and Development Authority.
Increasingly, as the health insurance industry evolves with more standalone health insurance firms coming in, portability is likely to become an intrinsic feature. Says Damien Marmion, CEO, Max Bupa Health Insurance Co. Ltd: “What is more important than portability across individual policies is portability from group health insurance to individual policy. An employee who is covered under a group policy suddenly finds himself without a cover the minute he leaves his job. We are looking at ways to bridge that gap. We want to create a platform where portability is possible from group to individual policies so that even if an employee leaves his group cover, he continues to remain insured by migrating to an individual policy.”
What to do
While the industry works out new plans and competition throws up innovations and options, make sure your family has adequate health cover. If you don’t have a cover, buy a full cover from a portability-friendly company. If you have an existing cover, buy the difference from the company you think is giving better features and prices. Also, till portability from group policies to individual policies happens, buy your own cover even if your employer gives you a cover.