Actor and singer Suchitra Krishnamoorthi recently took to social media after her health insurance claim was rejected over alleged non-disclosure of her medical history. She told Mint that the dispute stemmed from a policy she had ported to ICICI Lombard General Insurance Co. Ltd after being repeatedly pressured by her bank relationship manager. “The manager also told me I would get continuity benefits from my previous policy and that I didn't have to make any fresh medical disclosures,” said Krishnamoorthi. After nearly 30 years of having health insurance with no prior claims disputes, the rejection came as a shock. She has since taken the matter to the insurance ombudsman.
ICICI Lombard, however, maintains that the policy was received as a fresh proposal. “It came to us as a fresh policy with a good health declaration with no adverse disclosures. There was no trigger for any medical underwriting. Further, the claim submitted was for diagnostic and OPD expenses, which are not covered under the policy, as the insured had not opted for the OPD cover,” said Girish Sehgal, chief-health underwriting and claims, customer service and operations, ICICI Lombard.
Whatever the merits of Krishnamoorthi's case, her experience shines a light on a broader concern: portability, a framework designed to benefit policyholders, is increasingly being driven by sales incentives, despite regulations prohibiting it. Consequently, the weakest link is the advice provided by intermediaries facilitating such switches, often with little accountability.f
Here is another example. New Delhi-based Lokesh Sharma said his father (69), was sold a fresh health insurance policy every year for three years in the name of portability. The family discovered the issue only when a claim was rejected. "My father has had health insurance through his bank since 2019. When the premium rose from ₹70,000 to ₹1 lakh in 2022, we decided to discontinue it. The bank relationship manager connected us with a representative of the insurer who suggested switching to another product within the same company, assuring us that no fresh disclosures would be needed and the premium would be lower. We believed it was a port. But when we filed a claim, it was rejected on waiting period grounds because the policy had been issued as a fresh policy," Sharma told Mint.
The insurance ombudsman ruled in favour of the insurer because as a fresh policy, the claim was subject to a waiting period. The Sharma family now plans to move the consumer court, reeling under the consequences of a port gone horribly wrong. "My father genuinely believed the policy was being ported. The company has since terminated the employee who sold him the policy," he said.
Introduced in 2011, health insurance portability was meant to allow policyholders to switch insurers or products without losing continuity benefits on waiting periods already served and accumulated no-claim bonus. But according to Keshav Jain, director, Rajesh Chetan Insurance Brokers, this is being misused in some cases. "Since porting carries little or no commission, policies that should ideally be ported are often booked as fresh sales. We have handled several such cases during claims consultancy. Customers rarely examine the policy certificate to verify whether portability benefits have actually been carried forward," he explained.
But before we dive deeper into how portability is leading to distress, both at the point of sale and claims, here is a lowdown on how it works and the benefits it unlocks for you.
How portability works
To port your policy, you need to apply at least 40-60 days before the policy is due for renewal. The new insurer is required to obtain policy details from the existing insurer through the Insurance Information Bureau of India (IIB), an insurance data repository promoted by the Insurance Regulatory and Development Authority of India (Irdai). “Earlier, the portability process depended largely on insurers exchanging information among themselves, which often resulted in incomplete data, delays and customer complaints. That's why Irdai mandated that every portability request be routed through the IIB. It serves as a common repository and exchange platform for underwriting and claims data, and if any information is missing, IIB obtains it from the existing insurer within prescribed timelines,” explained Dr. Mukund Kulkarni, chief business officer, life and health, IIB.
The IIB enables insurers to access underwriting details, medical disclosures, claims history, waiting periods already served and other policy information, eliminating the need for policyholders to recreate their insurance history. The existing insurer must share the information within 72 hours, while the new insurer has to communicate its decision within five days of receiving the complete records.
"Many times, we discover that customers have not made appropriate health disclosures or disclosed their claims history after reviewing information available through the IIB. That helps us underwrite porting requests better," said Bhabatosh Mishra, director, underwriting, products and claims, Niva Bupa Health Insurance.
If the port request is accepted, continuity benefits are carried forward and explicitly mentioned in your policy certificate. You carry forward benefits such as waiting periods already served, no-claim bonus, continuity of sum insured and the moratorium period. For the consumers, to be able to port the moratorium period is important, because once you complete 60 months of continuous health insurance coverage, even across multiple insurers through portability, your policy or claim cannot ordinarily be challenged on the grounds of non-disclosure or misrepresentation, except in cases where fraud is established.
And this is the most important aspect of portability which is well documented in the policy certificate you receive. Any absence of your insurance history should be a glaring red flag.
Insurers discourage portability
Waiting periods protect insurers from immediate claims. When waiting periods are waived during a port through continuity benefits, insurers offset the added risk by introducing other safeguards. "These include mandatory deductibles, restrictions on higher sum insured and lower incentives for distributors," said insurance consultant Akshay Bansal.
Mayank Gosar, founder and chief executive officer of Softcon Capital, shared examples of insurer-specific portability norms that included deductibles in the case of HDFC Ergo General Insurance Co. Ltd and mandatory step-up in low sum insured policies and caps on high sum-insured policies in the case of Tata AIG General Insurance Co. Ltd.
From an insurer's perspective, ported customers carry a higher risk, prompting insurers to exercise greater caution. And this should also make consumers cautious of agents who aggressively recommend portability.
What should policyholders do?
Experts say portability remains a valuable consumer right, but only if policyholders follow the process carefully and verify that the policy has actually been issued as a ported policy.
"If you verify every detail before signing a cheque, why not do the same while buying an insurance policy?," Mishra asked. Policyholders should also not assume that information from the previous insurer is automatically transferred via the IIB portal even though it’s mandated by regulations. “In the absence of a dedicated reporting mechanism to Irdai, the possibility of portability transactions occurring outside the IIB-mandated platform cannot be entirely ruled out,” added Kulkarni.
For customers, such a market can have serious implications when making claims.
"The most common reasons for claim rejection under ported policies are non-disclosure of diseases and disputes over pre-existing disease waiting periods. More than half of the rejected claims in ported policies arise due to these reasons," said Shilpa Arora, co-founder and chief operating officer, Insurance Samadhan.
This is why it is important to carefully read your policy certificate and make full disclosures - even when you develop a new medical condition after being insured - when porting your policy. "The disease will not be treated as a pre-existing condition because the original policy inception date is considered for continuity benefits. However, depending on the underwriting assessment, the insurer may impose permanent exclusions in some cases," Mishra said.
Policyholders should also understand that continuity benefits apply only to the sum insured carried forward from the previous base policy. "Any additional sum insured opted for during porting will be subject to fresh waiting periods," said Bansal.
Portability is a valuable right, but it is not a paperwork-free process. Make fresh disclosures, preserve records from the previous insurer, verify that portability benefits are reflected in the Certificate of Insurance and avoid switching insurers just because the other policy is cheaper, especially if you have made claims or have developed medical conditions.