Health insurance portability is the right to move your health insurance policy from one insurer to another, or from one plan to another, without starting your waiting periods from zero. The insurance regulator, IRDAI, says an insurer must let you do this without losing the renewal credits you have already earned for pre-existing conditions.
What it is
When you buy a health policy, the insurer usually will not pay for a pre-existing condition, meaning an illness you already had before taking the policy. According to IRDAI’s policyholder information, such conditions can be considered for payment only after 48 months of continuous cover.
Those months of continuous cover are your renewal credit. Portability means the credit follows you when you switch, instead of being wiped out.
How it works
IRDAI says a circular effective 1 October 2011 directs insurers to allow portability between companies and between plans. The credit for pre-existing conditions enjoyed in the previous policy is preserved.
There is one important limit. The credit applies only up to the sum insured, including any bonus, under the previous policy. The sum insured is the maximum amount the policy will pay in a year.
For example, suppose your old policy had a sum insured of ₹5 lakh. If you move to a new policy of ₹8 lakh, the credit would be limited to the ₹5 lakh from the earlier policy, going by IRDAI’s description. The extra cover would be treated as new. IRDAI advises checking details with the insurer, since this illustration is only an application of the stated rule.
Timing matters too. IRDAI says a policy stays renewable if you pay the premium within 15 days of the expiry date, called the grace period. There is no cover for the gap, and the policy lapses if the premium is not paid within that window. Letting a policy lapse could therefore put your continuity at risk.
The 30-day initial waiting period, during which hospitalisation charges are generally not payable (accidents excepted), does not apply to renewals, according to IRDAI.
Why it matters now
The rule is not new, but the IRDAI policyholder pages continue to list it among the common questions policyholders ask. Premiums depend on factors such as age, medical history and claim-free years, so many people compare plans at renewal time.
Costs also tend to rise with the sum insured you pick, because room rent and other payable expenses are often linked to it. IRDAI notes it may not be easy to raise the sum insured after a claim, which is another reason people look at other insurers.
What it means for you
Before you switch, check these points:
- Continuity: apply before your current policy expires, and within the grace period at the latest.
- Credit limit: confirm how much of your previous sum insured and bonus will be recognised.
- Exclusions: read what the new policy does not cover. Standard exclusions can include dental treatment (unless hospitalisation is needed), spectacles and pregnancy-related treatment.
- Network: cashless treatment is available only at network hospitals, so check whether your hospitals are on the new insurer’s list.
- Family floater: a floater has one sum insured shared by the whole family, while individual policies have separate limits.
Remember that cover shrinks as claims are paid. If you claim ₹2 lakh on a ₹5 lakh policy, ₹3 lakh remains for the rest of the year.
Premiums paid by a mode other than cash may qualify for a deduction under Section 80D of the Income Tax Act. IRDAI’s page lists ₹15,000 for self, spouse and dependent children, and ₹20,000 for senior citizens. An extra ₹15,000 applies for parents, or ₹20,000 if they are senior citizens. The page does not distinguish between tax regimes, so check the current rules, or use the income tax calculator.
Common mistakes to avoid
- Assuming a lapsed policy can be revived after the 15-day grace period.
- Not reading the definition of pre-existing disease in the new policy.
- Assuming a bigger sum insured is fully covered by past credit.
- Overlooking sub-limits, since expenses beyond them must be paid to the hospital directly.
