Ensure you get continuity benefits when porting your insurance policy

Don’t select new policy based on price alone; look for old one’s shortcomings

In the wake of the pandemic, many customers are taking a hard look at their health insurance policies. They are porting their policies if they find them unsatisfactory.

For instance, the online insurance platform Policybazaar earlier saw an average 7-8 per cent of customers who wished to port. Between March and May that figure shot up to 15 per cent.

Plugging policy loopholes

People who had bought policies several years ago with a sum insured of ~1-2 lakh realised during the pandemic how inadequate that was. “Of the customers who wish to port, 80 per cent say they want an increased sum insured,” says Amit Chhabra, head-health business, Policybazaar.com.

A cap on room rent and ICU charges and co-payment requirement are other reasons as customers prefer policies without restrictions. A poor claim experience also acts as a trigger. “Customers are looking for service efficiency from their insurer,” says S Prakash, managing director, Star Health and Allied Insurance. Pricing is another driver. “When people cross the 40-45 or 45-50 age band, they usually see a steep jump in premium, which prompts them to look for a policy that offers better value for money,” says Nayan Goswami, head — general insurance, Sana Insurance Brokers.

Some companies have started covering the cost of consumables, like PPE kits. “During the pandemic, this cost rose to 15-20 per cent of the bill, so customers want policies that compensate this too,” says Chhabra. Home treatment cover, restoration of sum insured, and coverage for robotic and bariatric surgery are other features that customers look for. “When they discover that their current policy does not offer these latest features, they want to shift,” says Indraneel Chatterjee, cofounder, Renewbuy.com.

Run these checks

Do not select the new insurer merely on the basis of price, pay heed to policy features as well. Check the waiting period for pre-existing diseases (PEDS) and ailment-specific waiting periods. Avoid policies with sub-limits and co-payments. Chatterjee suggests checking the insurer’s claim settlement ratio. Your preferred hospital should be in the insurer’s list of network hospitals.

Buy adequate sum insured. A ~1 crore family floater, for a 35-yearold husband and wife, can be obtained for a monthly premium of ~1,228-2,622

(see table for individual

premiums).

Get continuity benefit

When shifting to a new policy, make sure there is no compromise on continuity benefit.

Suppose a person had bought a policy in 2015 and develops a cardiac condition in 2018, and decides to port in 2019. The new insurer should not treat his cardiac condition as a PED. “Any disease contracted after a customer has bought a policy should not be treated as a PED by the new insurer,” says Prakash.

The waiting period already served should be accounted for. “Suppose you had a disease when you bought the first policy and you have served the entire four-year waiting period. Now it should be covered by the new insurer. If you have served three years, you should only have to serve for one year in the new policy,” says Goswami.

Someone who has a policy should inform his insurer whenever he contracts a new ailment. “Get any new condition mentioned in your policy. This will ensure that when you port, the second insurer does not treat it as a new disease,” says Chhabra.

Should you port?

Your existing policy offers a few benefits. One is the right of renewability. “Even if you have made a massive claim, the current insurer has to cover you next year. When you port, the insurer will underwrite, and it could turn down your proposal if it does not consider you a good risk,” says Goswami.

There is also the incontestability clause. Once you have been with an insurer for eight years, your claim cannot be denied, even if it is found that you did not disclose a PED at the time of purchase.

Shift only if policy features are abysmal or service quality is consistently poor.

A person in good health will find it easy to port. Those who have developed some conditions may find it harder.

Begin early

Apply at least 60 days before the date of renewal of your current policy, so that there is enough time for the new insurer to do the underwriting and give a decision.“if you apply late and the new insurer declines your proposal, you won’t have time to apply to another,” says Goswami. Applying early will also mean you get the time to go through the new policy conditions and decide if they are acceptable.