Medical insurance portability good for policyholder
30 OCT, 2011, 04.49AM IST,
ASHISH GUPTA, ET BUREAU
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With effect from the first of this month, mediclaim insurance policyholders have been eligible to switch from one insurer to another and carry forward the no claim bonus entitlement. Policyholders will have the right to purchase a health insurance policy from another insurer from among the products that insurer is marketing. The right is limited to transfer of the period in the existing policy which will be accounted towards the time-bound exclusions of the new policy.
Health insurance portability was initially supposed to come into force from July 1, 2011. However, the Insurance Regulatory and Development Authority (IRDA) had deferred the date to October 1.
Portability means the right accorded to an individual health insurance policyholder (including family cover) to transfer the credit gained for pre-existing conditions and time-bound exclusions, if he chooses to switch from one insurer to another or from one plan to another plan of the same insurer, provided the previous policy has been maintained without any break.
The policyholder will have to approach the different insurer 45 days before his policy expires, to enable the new company to consider his application. The acquiring insurer will verify the claims history from the common database which will have two years of claims data. Based on the data, the acquirer will decide whether to accept the proposal, and the price at which it will do so.
The old insurance company will be bound to provide additional data to the new insurer within seven days of receipt of the application. The new insurance company would have to either accept or reject the proposal within 15 days after receipt of data from the old insurer. If the decision is not communicated within a fortnight, the new insurer will be bound to accept the proposal.
The guidelines also contain some good news for employees covered under group mediclaim. Anyone insured under a group policy will have to first shift his policy into an individual or a family floater cover with the same insurance company which has provided the group policy. After a year, he will have the option to shift to any other insurance company just like any other individual policyholder.
While the new insurer is bound to consider every application, the acceptance will be subject to the new insurer's rules. For instance, if the old policy offers 90 day post hospitalisation treatment and the new insurer provides only 60 days, the new policy will have only 60 days' cover.
It is to be noted that portability is applicable only from one non-life insurance company to another one. The bonus accrued, if any, will be carried forward by the new insurer after migration. In addition to individual policies, portability is also extended to family floating policies.
In case the outcome of acceptance of portability is still waiting from a new insurer on the date of renewal, the existing policy is allowed to be extended, if requested by the policyholder , for a short period with a pro-rate premium for the period, which will be of at least one month. The insurer cannot cancel an existing policy until such time a confirmed policy from a new insurer is received or at the specific written request of the insured.
In case the insured intends to continue the policy further with the existing insurer, it should be allowed at the regular premium and without imposing any new conditions. For any health insurance policy, the waiting period with respect to pre-existing diseases and time-bound exclusions should be taken into account. If the waiting period for a certain disease or treatment in the new policy is longer than that in the earlier policy for the same disease or treatment, the additional waiting period should be clearly explained to the incoming policyholder .
The portability will be applicable to the sum insured under the previous policy and also to an enhanced sum insured, if requested by the insured, to the extent of cumulative bonus acquired from the previous insurer under the previous policies. For example, if a person had a sum insured of Rs 2 lakhs and accrued bonus of Rs 50,000 with an insurer, when he shifts to another insurer and the proposal is accepted, the new insurer has to offer him a sum insured of Rs 2.50 lakhs by charging the premium applicable on Rs 2.50 lakhs.
If the new insurer has no product for Rs 2.50 lakhs, he has to offer the nearest higher slab, say Rs 3 lakhs, to the insured by charging the premium applicable to Rs 3 lakhs. However, portability is available only up to Rs 2.50 lakhs.
The move provides an opportunity to new entrants to attract more business. The switchover will be more on the basis of quality of service and less because of price, because the rates are more or less similar.
The major beneficiary will be the insured because he now has the flexibility to choose and change in case he is not happy with the service of his insurance provider. The guidelines now remove the risk that the new insurer will reject a claim on the grounds that the ailment was existing before the policy was issued.
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With effect from the first of this month, mediclaim insurance policyholders have been eligible to switch from one insurer to another and carry forward the no claim bonus entitlement. Policyholders will have the right to purchase a health insurance policy from another insurer from among the products that insurer is marketing. The right is limited to transfer of the period in the existing policy which will be accounted towards the time-bound exclusions of the new policy.
Health insurance portability was initially supposed to come into force from July 1, 2011. However, the Insurance Regulatory and Development Authority (IRDA) had deferred the date to October 1.
Portability means the right accorded to an individual health insurance policyholder (including family cover) to transfer the credit gained for pre-existing conditions and time-bound exclusions, if he chooses to switch from one insurer to another or from one plan to another plan of the same insurer, provided the previous policy has been maintained without any break.
The policyholder will have to approach the different insurer 45 days before his policy expires, to enable the new company to consider his application. The acquiring insurer will verify the claims history from the common database which will have two years of claims data. Based on the data, the acquirer will decide whether to accept the proposal, and the price at which it will do so.
The old insurance company will be bound to provide additional data to the new insurer within seven days of receipt of the application. The new insurance company would have to either accept or reject the proposal within 15 days after receipt of data from the old insurer. If the decision is not communicated within a fortnight, the new insurer will be bound to accept the proposal.
The guidelines also contain some good news for employees covered under group mediclaim. Anyone insured under a group policy will have to first shift his policy into an individual or a family floater cover with the same insurance company which has provided the group policy. After a year, he will have the option to shift to any other insurance company just like any other individual policyholder.
While the new insurer is bound to consider every application, the acceptance will be subject to the new insurer's rules. For instance, if the old policy offers 90 day post hospitalisation treatment and the new insurer provides only 60 days, the new policy will have only 60 days' cover.
It is to be noted that portability is applicable only from one non-life insurance company to another one. The bonus accrued, if any, will be carried forward by the new insurer after migration. In addition to individual policies, portability is also extended to family floating policies.
In case the outcome of acceptance of portability is still waiting from a new insurer on the date of renewal, the existing policy is allowed to be extended, if requested by the policyholder , for a short period with a pro-rate premium for the period, which will be of at least one month. The insurer cannot cancel an existing policy until such time a confirmed policy from a new insurer is received or at the specific written request of the insured.
In case the insured intends to continue the policy further with the existing insurer, it should be allowed at the regular premium and without imposing any new conditions. For any health insurance policy, the waiting period with respect to pre-existing diseases and time-bound exclusions should be taken into account. If the waiting period for a certain disease or treatment in the new policy is longer than that in the earlier policy for the same disease or treatment, the additional waiting period should be clearly explained to the incoming policyholder .
The portability will be applicable to the sum insured under the previous policy and also to an enhanced sum insured, if requested by the insured, to the extent of cumulative bonus acquired from the previous insurer under the previous policies. For example, if a person had a sum insured of Rs 2 lakhs and accrued bonus of Rs 50,000 with an insurer, when he shifts to another insurer and the proposal is accepted, the new insurer has to offer him a sum insured of Rs 2.50 lakhs by charging the premium applicable on Rs 2.50 lakhs.
If the new insurer has no product for Rs 2.50 lakhs, he has to offer the nearest higher slab, say Rs 3 lakhs, to the insured by charging the premium applicable to Rs 3 lakhs. However, portability is available only up to Rs 2.50 lakhs.
The move provides an opportunity to new entrants to attract more business. The switchover will be more on the basis of quality of service and less because of price, because the rates are more or less similar.
The major beneficiary will be the insured because he now has the flexibility to choose and change in case he is not happy with the service of his insurance provider. The guidelines now remove the risk that the new insurer will reject a claim on the grounds that the ailment was existing before the policy was issued.
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