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Health Insurance Portability Still Favors Low-Risk Policyholders
Health insurance portability is meant to let people move from one insurer to another without losing certain benefits.
However, the new insurer can still check the applicant’s health and decide whether to accept them.
This can make switching difficult for older people and those with medical conditions.
Some applicants may be rejected or offered coverage with higher premiums, co-payments or exclusions.
People must usually begin the transfer process at least 45 days before their policy ends.
If they increase their coverage, the waiting period may restart for the extra amount.
The regulator has ordered insurers to share claim information quickly and make decisions within five days.
Even with these rules, the people who most want to switch may still find it hardest to do so.
Health insurance portability lets policyholders transfer continuity benefits, but destination insurers can underwrite applications anew.
Older adults, diabetics and recently hospitalised applicants may face rejection, premium increases, co-payments or exclusions.
Requests must generally be initiated at least 45 days before policy expiry to avoid another year with the existing insurer.
Continuity benefits apply only up to the existing sum insured; added coverage receives a fresh waiting period.
The Insurance Regulatory and Development Authority of India has tightened timelines, but commercial underwriting and distribution practices continue to limit portability.
- Who
- Health insurance policyholders, particularly senior citizens and people with medical conditions, insurers, and the Insurance Regulatory and Development Authority of India.
- What
- Health insurance portability allows policyholders to seek a transfer of coverage and accrued benefits, but new insurers can independently underwrite and reject applications or impose stricter terms.
- Where
- Across India’s retail health insurance market.
- When
- The portability framework was introduced in 2011; the Insurance Regulatory and Development Authority of India issued a relevant master circular in May 2024.
- Why
- Portability was intended to reduce customer lock-ins, but underwriting practices and procedural requirements continue to restrict transfers, especially for higher-risk applicants.
Policyholder Protection
Insurer Underwriting Discretion
Purpose of portability
Policyholder Protection
Portability was created to help customers leave insurers with poor service or rising premiums and avoid being locked in.
Insurer Underwriting Discretion
Destination insurers retain the authority to assess every incoming application and decide whether the risk is commercially acceptable.
Access for higher-risk customers
Policyholder Protection
Older people, diabetics and recently hospitalised policyholders need portability most because they may be dissatisfied with existing coverage but have few alternatives.
Insurer Underwriting Discretion
Insurers may limit exposure to higher-risk applicants through rejection, premium loadings, co-payments or exclusions.
Regulation versus market practice
Policyholder Protection
The regulator has introduced claim-history and decision-making deadlines, shorter waiting-period rules and a five-year moratorium to reduce consumer friction.
Insurer Underwriting Discretion
Commercial underwriting and distribution networks can still favour younger, healthier and more profitable customers despite regulatory restrictions.
Key facts
- Portability framework
- Introduced in 2011 to help policyholders switch insurers without losing specified accrued benefits.
- Transfer deadline
- Requests must generally be initiated at least 45 days before policy expiry.
- Continuity limit
- Waiting-period credit applies up to the existing sum insured.
- Higher coverage
- Any additional sum insured receives a fresh waiting period.
- 2024 operational deadline
- Existing insurers must share claim history within 72 hours, while destination insurers must decide within five days.
- Moratorium
- A five-year moratorium limits claim contests based on non-disclosure, except in proven fraud cases.
- Senior-citizen inquiries
- Porting inquiries from senior citizens reportedly increased by 61 percent.
Sources
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