Health Insurance Portability Problem Solved

Many of us have already taken various health insurance policies and many are yet to take a proper health insurance policy. Of course, the right ways of choosing good health insurance plan and various checklists before choosing the plan are available in the web for your reference. I am here posting a simple problem relating to Health Insurance Policies which are experienced by everyone. In fact, this problem was cured by the circular of Insurance Regulatory and Development Authority.

The problem relates with the portability of health insurance plans. Portability means the quality or state of being movable. In relation to insurance it means the ability of an insured to retain benefits when switching insurers. Generally health insurance policies do not take into account pre-existing diseases for a specified period of cover during the starting years of the plan. The same thing gets worse when the insured changes to another insurer. Most often the insured will not get any credit for the period with the previous 

insurer when changing to new insurer.

Now the Insurance Regulatory and Development Authority of India(IRDA), as per its circular dated 10-02-2011 dealt with this issue of portability of Health Insurance Policies. Now the waiting period in the previous insured plan will have to be accounted or credited when changing to the new insured. The example quoted by IRDA is "...if under a previous policy, the condition was excluded from coverage for two years and under a new plan with a different insurer the exclusion period for the same condition is three years, the new health insurance policy can only exclude the condition from coverage for one extra year." Here the condition is that the previous policy should have been maintained without breaks. However, discontinuance of the policy because of the delay caused by the insured in accepting the proposal has to be avoided. For furthering this the IRDA has asked the insurers to speed up the process of communication of proposals by reference to its regulation dated 26-04-2002 where in Regulation 4(6) it is mandated that the proposals shall be processed by the insurer with speed and efficiency and all decisions thereof shall be communicated by it in writing within a reasonable period not exceeding 15 days from receipt of proposals by the insurer.

The insurers have been asked to acknowledge the applications for the portability within three working days. However it is upon the policy holders to give the application much earlier to the renewal date of the policy to avoid any delays.

In concluding the Insurance Regulatory and Development Authority has done a great job sticking to its mission to protect the interests of the policyholders and ensure orderly growth of the insurance industry.