All soaps are for cleaning us up but we pay more for Dove because it offers many more features than say a Dettol soap (like creaminess, moisturizing, gentle on the skin etc). Dettol soap stands for one thing – it cleans up germs. Like soap, health insurance is a commoditized product today. And just like soap there are many health insurance products. The insurance product that gives you more features will charge a higher premium. So if you want higher number of days of pre & post hospitalisation coverage or coverage of a pre-existing disease from Day 1, you will have to pay more.
When you are buying health insurance for the first time, the premium is not the only aspect to consider. It is important to assess the features, understand the waiting periods & exclusions. But what if you already have an existing policy? The good news is you can move your policy from one insurance provider to another (much like mobile connection porting).
I can think of only two scenarios where one should port their existing insurance. The first is if you are covered by a nationalized insurance company. Generally, you will find that their policies have a lot of ‘sub-limits’ or restrictions. The usual restrictions are
A. room rent limit up to 1% of coverage
B. ICU room rent limit up to 2% of coverage
For example, if your coverage is Rs 5.00 lakhs and you are admitted to a hospital, they will pay a maximum of Rs 5,000 per day as room rent. If ICU admission happens, they will pay a maximum of Rs 10,000 per day
C. Each procedure is also likely to have a sub-limit.
For example, a cataract removal procedure may cost Rs 50,000 but the insurance company will have a sub-limit of Rs 35,000 i.e. they will pay only up to Rs 35,000. Any cost above that is payable by you. But if you are with a private sector insurer and choose coverage of Rs 5.00 lakhs or higher, typically such restrictions won’t apply. So the first advantage of porting is that you will get better features.
The second advantage of porting is waiver of waiting period for pre-existing diseases. What does this mean? When you apply for health insurance, you have to declare pre-existing diseases if any. The insurance company is not liable to cover you for any expense arising due to that condition for the next 2 to 4 years. For example, if you have sinusitis, related medical expenses will not be covered for 2 years. But if you’ve completed 2 years and are then porting your policy, the new provider will take this into account and waive off the condition. See how it paid off that you were already covered.
The other scenario where you are likely to port the existing policy is when you've made a claim and found the servicing processes poor. In this case too, you should consider porting your health insurance.
As I mentioned earlier, health insurance policies have a lot of features but they also have a lot of clauses and exclusions. The important thing about porting is to clearly understand the benefits / waiting periods / exclusions / premium offered by your existing insurer and compare it with what the new insurer is promising. If you want to assess your existing policy, reach out to me at mathewpravin@yahoo.com and I can help you compare and select a suitable policy.
