Opportunities, risks in porting health policy

A few days ago in this column, we examined the risks some insureds encountered while attempting to port hospitalisation policies. After paying the premium, they found themselves either without cover for a period or saddled with terms materially different from what they had proposed and paid for.

In this context, let us look at how you can port policy smoothly —what advantages you should leverage, and the risks and mistakes you should avoid.

Portability — the facility to shift a hospitalisation insurance policy from one insurer to another — was unveiled in end 2011 by the insurance regulator, opening up options for insured to better terms elsewhere and nudge insurers to focus on customer retention via fair pricing and improved service.

No simple exercise

The inspiration was mobile number portability implemented earlier in 2011 giving consumers unprecedented freedom. However, insurance is a far more complex. Porting a health policy was never meant to be a simple “walk in with KYC and switch” exercise, as in the case of mobiles.

Why would you want to port the policy? Primarily, to access better products, get wider coverage or more suitable policy terms with another insurer. This could mean broader risk cover, fewer restrictions, higher sum insured or more competitive pricing.

Equally crucial are service-related considerations — poor responsiveness, unsatisfactory TPA performance or an inadequate hospital network.

That said, porting is not a step to be taken lightly. Your new insurer has the right to accept/reject the proposal. Contrast this with your position with the existing insurer, who is obligated under norms to offer lifelong renewal, provided there is no fraud or material non-disclosure.

Portability does come with certain protections. The destination insurer has to carry forward key accrued benefits from the existing policy — sum insured, no-claim bonus and the credit built up towards completing waiting period for pre-existing diseases and specified treatments

The new insurer, however, is free to set its premium. This is often the very reason porting appears attractive. But as highlighted in the earlier article, it is crucial to ensure you have firm, final terms and rates before letting the existing policy lapse. If this clarity is missing, it is safer to renew with the current insurer — on known, even if imperfect, terms — and work on porting the next year.

A few decision-making pointers may help.

Porting tends to be smoother if you are young or middle-aged and do not have major pre-existing conditions. From an underwriting perspective, you represent a lower risk with many premium-paying years ahead, making acceptance more likely.

In such cases, porting can be a good opportunity to move to policies with better coverage, fewer sub-limits (such as on room rent) or more favourable pricing.

On the other hand, if the current insurer provided good service — prompt claim settlements, reliable TPA support — and you are close to completing waiting periods for pre-existing conditions, continuity itself has value. In such situations, porting may not be the optimal choice.

Instead, consider increasing sum insured with the same insurer, or adding a top-up or super top-up policy. The options typically need no fresh medical underwriting, avoid unpleasant surprises and allow you to continue seamlessly with an insurer you already know. This approach also works well if you have employer-provided base cover and are building personal health insurance alongside it.

Retirement age

For those approaching or past retirement age, porting can be particularly risky. The outcomes may include outright rejection, sharply higher premiums, or additional exclusions and conditions. Staying with the existing insurer preserves the right to lifelong renewability — a benefit that should not be underestimated in today’s health cover landscape.

Here again, top-ups and super top-ups are efficient ways to expand coverage. When accepted, they offer a significantly lower premium per rupee of sum insured compared with a base policy.

Finally, remember this distinction: porting policy is your right, but underwriting remains the insurer’s right. In the coming articles in this column, we will outline a practical game plan and decision matrix to help you navigate this process with clarity and confidence.

(The writer is a business journalist specialising in insurance & corporate history)

Published – February 23, 2026 06:03 am IST