If you already have taken Health Insurance in the past, you might have been tempted to shift insurers who offer better cover or lesser premiums.
There is, however, one big issue : waiting periods will start again under the new policy.
It is possible for an insured to switch insurers and have the waiting periods waived under the portability guidelines.
The waiting period waiver is given to the extent of the claim free years he is present in the current policy and is limited to the current policy sum insured.
Assume Raju took a health insurance policy for 5 lacs two years ago. He wants to change the insurer when the policy is due for renewal now.
It is suggested that he apply to a new insurer 45 days before the renewal date of current policy.
Assume he decides to take a policy from a new insurer for 10 lacs. He currently has a policy for 6 lacs (5 lacs of base sum insured + 1 lac of cumulative bonus).
Under the new policy, the insurer will waive the 30 days waiting period, 1 or 2 years specific disease waiting period, and reduce the pre-existing disease waiting period by 2 years only for the first 6 lacs and not for the entire 10 lacs.
It's not as simple as that, however.
The New Insurer will make you sign the proposal form in which you need to declare your current Health Conditions.
So let's say that Raju got diagnosed with diabetes six months back. So in his current policy policy, diabetes will be covered since it is diagnosed after taking his health insurance policy. However the new insurer may refuse the cover citing the reason diabaties as pre existing.
If Raju forgets to declare the Diabaties information in the proposal form, the insurer might give him the cover now, but his claim will be rejected on the basis of misrepresentation of material facts”
So in short, portability in a way is not portability in the true sense.