Despite the disenchantment, policyholders don't want to switch their health insurance provider because they lose out on certain benefits, such as the cover for pre-existing diseases. Certain pre-existing diseases and medical conditions are covered by health insurance only if the policy has been in force for 3-4 years.
If the customer switches to a new company, the waiting period starts all over again. Last week, the Insurance Regulatory and Development Authority (Irda) declared that from 1 July this year, all existing medical insurance policies will become portable.
This means that if a customer changes his insurer, he can carry forward the benefitswaiting period for pre-existing diseases to the new company. If your current insurer requires you to wait for four years before pre-existing conditions are covered and you switch after two years to a new insurer (which also has a similar four-year waiting period for pre-existing conditions), the waiting period with the new insurer would only be two years.
It's a move that will help customers and allow them to switch to better, more responsive companies without losing any of the accumulated benefits. It will also nudge health insurers to improve their service levels in order to retain customers. "Portability would call for minimum service requirements among insurance companies. It is expected to bring in new benchmarks in terms of service standards and delivery mechanisms," says Antony Jacob, CEO, Apollo Munich Health Insurance.
To be fair, much of the displeasure among customers stems from a poor understanding of the features and benefits offered by health insurance plans. This leads to a lot of heartburn at the time of making a claim.
On the other hand, there are many cases where customers have genuinely suffered due to clerical lethargy in PSU firms, high-handedness of third-party administrators and denial of claims by private insurance companies. Delhi-based entrepreneur Ajay Sharma (see picture) is one such dissatisfied customer who wants to change his insurance provider once portability is introduced.
In some cases, one might want to shift because there are better options available. For instance, one may want to switch from individual health policies for all family members to a floater plan that offers a larger cover at a lower price.