Policyholder looking for a change in your insurance terms? Choose between migration vs portability—Here’s the difference

Planning smartly for the future and for unexpected situations is essential. Notably, when saving for your healthcare and related medical expenses, it is important to identify your goals, health status, family health history, and possible devaluation of assets due to inflation and other factors.

A health insurance policy is a good buffer in most cases and it’s best to invest in one based on your specific individual and / or family needs. In any case, you don’t have to feel stuck with a policy, and it is here where the options of portability or migration can be considered.

The migration and portability guidelines issued by the Insurance Regulatory and Development Authority of India (IRDAI), are applicable to all retail (individual) and group indemnity health insurance products; and both individual sum insured and family floater sum insured policies.

What is Portability?

According to IRDAI’s definition, portability is the right for individual health insurance policyholders to transfer the credit gained for pre-existing conditions and time bound exclusions, from one insurer to another. It helps policyholders to negotiate better or improved services, broader coverage, transfer or carry-forward of benefits, lower insurance premiums (especially for senior citizens) from insurance companies.

Notably, you can port your health insurance policy as many times as you like, provided the new insurance company accepts your portability requests. However, porting is possible only at the time of existing policy renewal. Further, the insured can only port the existing policy to a similar health indemnity policy of the other insurer.

IRDAI’s rules state that you can switch health insurance providers at the time of policy renewal with request made 45 days before your existing policy’s renewal. You do not have to pay additional amount to port your health insurance policy, only the premium of the new health policy.

As per the IRDAI’s guidelines, a health insurance company must acknowledge a portability request within three days of receiving it. They need to either accept or reject a portability request within 15 days of receiving all requested documents. In case of any delay, they will have to accept your portability request.

What is Migration?

Further, IRDAI defines migration as the right of health insurance policy holders to transfer the credit gained for pre-existing conditions and time bound exclusions, with the same insurer. This helps you gain better terms or shift policies for better or improved services, with the same Insurer.

You have to apply at least 30 days before the premium renewal date of the existing policy.

You have the option to shift to a similar individual health insurance policy or to a group health insurance policy, provided the members meets the terms related to health insurance coverage of the group policy. Further, you can also move from a group to an individual policy, in cases where — you exit the group policy, modify the group policy or withdraw the group policy.

In order to avail migration benefit, individual policyholders must have continuously renewed the previous policy without break for minimum of four years, without any underwriting to the extent the sum insured and the benefits available in previous policy.

However, group migration to an individual policy will be subject to underwriting and the provider has to inform its decision to the insured within 15 days of receiving the request.

Porting vs migrating in health insurance: Differences

• Migration means shifting to a new plan with the same insurer, carrying over accrued benefits like waiting periods.
• Porting allows moving to a different insurer, also transferring benefits, though it’s like a new purchase with potential rejections or higher premiums.
• Shifting may be relatively easy since the insurer remains the same, but you are still buying a new policy, and the process of purchase will remain the same.
• The accrued benefits, such as waiting periods for pre-existing diseases, are carried over to the new plan.
• Porting will function like buying a new policy and underwriting rules will apply. There’s also a chance that your application may be rejected, or you may have to pay a higher premium for a plan with better features.
• As with migration, in this case, too, the accrued benefits are carried over to the new plan.

Disclaimer: This story is for educational purposes only. The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.