Coming soon: 'Portable' health policies

Insurers widen age limit to between three months and 65 years.

Over the coming months, a majority of the population would be permitted to change their health insurer without having to lose any of the benefits that had accrued to them.

The proposed portable health insurance policy, earlier to be sold only to those between 18 years and 40 years, is to now cover individuals from three months to 65 years.

The product, which has been in the works for over a year, has been cleared by the General Insurance Council, the industry lobby, which will approach the regulator to approve the product.

“We will file the product in a week,” the council’s Secretary General S L Mohan told Business Standard. The Insurance Regulatory & Development Authority will take a maximum of 90 days to clear the policy.

At present, many consumers do not change their service provider even if they are not satisfied with the service, for fear of losing the no-claim bonus or of the coverage being lowered.

If you have a portable health cover, the new service provider cannot exclude, say, heart-related problems, citing previous history. At present, insurance companies cover an illness only after the policy has been in operation for four years. They often deny claims in the first few years on the grounds that the ailment was “pre-existing”.

The new policy will be portable across non-life insurance companies and a shift from one company to another will be allowed at the time of the annual renewal.

Insurance companies are, however, unwilling to offer the facility to carry forward your no-claim bonus, which, in the case of a health cover, is in the form of higher sum assured.

“This will depend on companies. If they are willing to allow for no-claim bonus to be included at the time of transfer, who can stop them,” said an insurance company executive.

The other deterrent is the low coverage value, which in the initial years has been capped at Rs 1 lakh annually. “The product is available for a period of three years initially. We will review the product after taking feedback from the industry and policyholders”, said Mohan.

The General Insurance Council has finalised the details of the coverage but companies have been given the freedom to decide the premium.