Health Cover or Cell Number Portability’s for Your Good

New Delhi’s Dhruv Sharma, 47, had a family health insurance of Rs 5,00,000 from Reliance General Insurance Company for four years and was paying a yearly premium of around Rs 5,700, but in March this year when he received the renewal notice he was astonished to see a nine times hike in the premium, to Rs 50,000, although he had not registered any claim in the previous year. He then decided to discontinue that plan and take a new plan from Star Health and Allied Insurance Company by paying around Rs 18,000, by sacrificing his no-claim bonus and coverage of pre-existing diseases. He thinks that the Insurance Regulatory and Development Authority’s move to make health insurance portability mandatory will benefit the end customer and will make insurers more policyholder friendly.

With all the excitement over implementation of health insurance portability from July 1, Financial Chronicle sought the opinion of policyholders to understand their expectation from portability.

Mumbai’s Vishal Mundadha, 31, who had an ICICI Lombard individual health cover of Rs 3,00,000 for past four years found the claim procedure to be too complex when he was hospitalised. He was asked to submit various documents on numerous occasions and he felt that if insurer had better tie-up with the hospital, he would have faced less difficulty. Later, on a friend’s recommendation he decided to buy Bajaj Allianz health insurance with an annual premium of around Rs 9,000 for a cover of Rs 4,00,000. He now thinks if portability had been introduced earlier he would have been able to transfer the cover for pre-existing diseases while switching over to his new policy.

The portability regulation allows policyholders, who have continued their policy from one insurer for certain period to switch to some other insurer, in which case the waiting period for some pre-existing diseases will be waived off and policyholders gets cover for those diseases in the new policy. Also in cases where policyholder believes some features such as life-long renewal, maternity or critical illness cover available in other insurer’s health policy to be useful, he will now be allowed to port his policy to that new policy under the portability regulations.

However, there are customers who are satisfied with their insurers.

New Delhi resident VC Dogra, 62, has never faced any difficulty with New India Assurance in claim settlement or services and so he is inclined to continue with the existing policy. But he believes portability guidelines will bring more discipline among private insurers and would make them develop better relations with health care centres and customers so that in cases of emergencies patient is not harassed.

It is clear that allowing portability will force the insurers to set their own benchmark in terms of service standards and delivery mechanisms. “Portability will call for minimum service requirements among all insurance players and in the long run, it would be the company with better services and integrity that would stand to gain,” said Antony Jacob, CEO, Apollo Munich Health Insurance Company.

Jump in Travel Insurance Sales as Holiday Season Takes Off

As many Indians pack their bags and head beyond the boundaries for a vacation, insurers are witnessing a 30-40 per cent jump in travel insurance policy sales during the summer season.

The May-June months traditionally see an increase in travel and tourism activities as most families and students plan their vacation during this period. This is because schools and colleges are closed for summer vacation and many of them look to escape the hot weather in the subcontinent.

Though North America and South-East Asia have been traditionally popular with domestic tourists, Europe has also received a lot of interest this time around, Mr Gaurav Garg, Managing Director and Chief Executive Officer, Tata AIG General Insurance, told Business Line.

“Europe is more expensive than Asian or American destination. However, with awareness increasing, Indians getting richer and travel companies offering better packages, we have seen an increase in the popularity of European destinations,” he said.

He added that the take-up rate of policies, the highest in May, has gone up by 30-40 per cent. Over the same period last year, the increase was around 25 per cent.

Apollo Munich Health Insurance said that the April to June period accounts for 40 per cent of its total travel insurance business for the whole year.

“Over the last few years we have witnessed a rise in the volume of travel insurance business during the summers, which eventually peak between the months of April and June. In the last couple of years, the maximum policies were sold for worldwide option where the US and Canada are also included,” said Mr Antony Jacob, CEO, Apollo Munich Health.

Travel insurance premiums are also the highest for North America, as medical costs in the US are higher than most other regions. Companies usually bracket North America into a different premium slab from the rest of the world.

“The cost of treatment, even for a medical emergency in the US is very high in comparison to Asian countries. The premium rate for travel insurance, for a trip by an individual to the US or Canada, is approximately 20-25 per cent higher than that of a trip to West Asia ,” said Mr Jacob.

The exact premium, however, is calculated based on the age of the traveller, sum insured, trip duration, type of travel (annual multi-trip or single travel), besides the region.

How You Gain From Health Portability

Are you satisfied with your health insurance provider? Most Indians aren't. A study conducted by the Voluntary Organization in Interest of Consumer Education a few years ago found that a majority of the 3,600 respondents across eight metros had faced some problem or the other while dealing with their insurance providers. Health insurance holds the dubious distinction of having the highest level of customer dissatisfaction.


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.