Pros and Cons of Health Insurance Portability

Posted on: Dec 12, 2023 | | Written by:

Pros and Cons of Health Insurance Portability

Publication date: December 12, 2023. EST READ TIME: 3 MIN

A health insurance policy is an important financial shield for medical emergencies. However, as your healthcare requirements change with age, you may want more suitable health insurance coverage for assured financial protection. However, if you buy a new plan, you will have to serve a new waiting period and pay the bills out of pocket if there is a medical emergency. This is when health insurance portability comes into the picture.

Under health insurance portability, you can transfer your health insurance plan from the old insurance company to the new one while retaining some important benefits. If you are not happy with the services offered by your current insurer or want to opt for a better health plan, health insurance portability is a good option. Let’s take a look at the advantages and disadvantages of health insurance portability.

Understanding health insurance portability

Health insurance portability is an important benefit offered by IRDAI. It simply means that if you want to port your healthcare plan from one insurer to another, you can do so without losing certain benefits.

For example, when you port to a new insurance company, you will not lose important benefits, like the waiting period for covering pre-existing conditions.

Most health insurance policyholders opt for healthcare plans for the following reasons:

• To meet their evolving healthcare needs

• To get a higher sum insured and better coverage at affordable rates

• For proximity of network hospitals

• If they have relocated to a new town or city

• If they are unhappy with the customer service of the existing insurance company

Advantages of health insurance portability

The following are the advantages of health insurance portability —

1. Continuity of benefits:

Health insurance portability allows you to switch from one insurance provider to another without losing the benefits of your existing healthcare plan. For example, if you have already served the waiting period for pre-existing conditions in your old health plan, the same will be transferred to the new one. Therefore, the new insurance provider must cover your pre-existing conditions from day one.

2. Better coverage:

If your healthcare requirements have changed or your family has grown, you can port to a new health plan that better fits your needs.

3. Better services:

If you are not satisfied with the services offered by the current insurance provider, you can switch to a new one without worrying about losing the waiting period and other benefits.

4. No loss of no-claim bonus:

When you port your health plan, the no-claim bonus earned on your old health insurance policy gets transferred to the new plan.

Disadvantages of health insurance portability

Although health insurance portability is a good option for those who want to switch to a new insurance company, it has a few disadvantages as well. The following are the drawbacks of porting your health plan —

1. Porting rules:

You can port your health plan only at the time of policy renewal.

2. Higher premiums:

Health insurance portability may increase the premium of your health plan. This will depend on your age, current health, city of residence and other factors like more add-on covers.

3. New coverage terms:

Health insurance portability will change the terms and conditions of your health insurance policy. So, you will have to acquaint yourself with the same all over again.

Conclusion

To sum up, before you switch to a new health insurance provider, consider the advantages and disadvantages of health insurance portability and make an informed decision. Also, it is important to note that the new insurance company can deny your portability request on grounds of late application, incomplete documentation, and so on. Therefore, make sure you do good research and evaluation before opting for health insurance portability.

Disclaimer: The above information is for illustrative purposes only. For more details, please refer to the policy wordings and prospectus before concluding the sales.

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