It is common practice for banks to collaborate with insurers to offer group health insurance at discounted rate. While the economic benefit draws the buyers they do not come without potential downsides.

In the event of a bank merger, there is no assurance the acquiring bank will continue its partnership with the current insurer. Moreover, such plans come with room-rent caps, sub-limits. Insurers can terminate the group plan midway, leaving customers without coverage and exposing them to risks.

IRDAI has recently addressed this issue. Recently, norms were issued to port from group to individual retail coverage. This ensures personalised and flexible approach to one’s health insurance needs.

Retail plans best bet

Retail individual health policies offer several advantages compared with bank-based plans. With lifetime renewability, they ensure continuous coverage. They generally include fewer sub-limits, offer more coverage for various medical expenses. They allow room for personalisation, letting you adjust the coverage to better match specific needs. Also, the plans include add-ons such as consumables, OPD and reduced waiting period for pre-existing disease.

Following the update, consumers are showing a gradual shift towards personal policies. Of the total health insurance customers porting policies, 15% are now opting to switch from bank-based to retail individual plans, as per our insights. With these norms, the IRDAI empowered consumers by providing them with greater flexibility and control over health policies.

When choosing a new policy, evaluate specific health needs and those of family, including any chronic conditions or regular medications. Pay attention to deductibles, co-payments and coverage limits to understand potential out-of-pocket expenses. Make sure preferred healthcare providers are included in the plan’s network and prescription medications covered. Verify the plan offers adequate preventive care and emergency services. Also, research the insurer’s customer service and be aware of policy exclusions.

Porting process

Under portability, policyholders can change insurer or plan by following the IRDAI’s standard procedures. You need to request portability at least 45 days before the current policy expires. The new insurer will then provide you forms and offer details on plans. Pick the plan and submit documents. The insurer will review your information, including previous claims and medical records. Based on this, the insurer will decide on portability request, with a decision timeframe of 15 days.

Portability enables you to switch insurers or plans while retaining the benefits accumulated under your current policy, making the transition smooth and hassle-free. This allows you to change insurer without losing continuity benefits, such as waiting periods and other advantages.

This is particularly advantageous if you need urgent and costly medical care during the transition. Without portability, opting for a new policy might leave you without coverage for an initial waiting period.

Transitioning from a bank-based group policy to an individual retail policy offers significant advantages, including greater flexibility, comprehensive coverage and the ability to retain accumulated benefits.

IRDAI’s recent guidelines facilitate this process, empowering clients to make more informed choices about health insurance. By evaluating specific needs and carefully considering terms of potential new policies, you can ensure continuous coverage and avoid potential gaps. Embracing changes allows for a more tailored experience, providing peace of mind and security in managing health care needs.

(The writer is Head, Health Insurance, Policybazaar.com)

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