THE penetration of medical insurance is extremely low in our country, at around 15%, including all types of insurance — central government health scheme, employee state insurance, group health and individual health. There are concerted efforts initiated by the government as well as the Insurance Regulatory and Development Authority (Irda) to improve the reach of health insurance to all sections of society and safeguard the interest of policy holders.
One of the important initiatives of the regulator is the proposed portability of health insurance. This is to ensure that a customer continues to enjoy benefits under his health policy even if he wishes to change his insurance provider for genuine reasons.
In the current scenario, a customer is more or less wedged to an insurance company, given that if he chooses another insurer during renewal, his policy starts afresh with all the waiting periods commencing again. For the uninitiated, waiting period is the time frame during which some of the claims shall not be payable under the health policy. For most new health policies there is a waiting period of 30 days under which no claim can be made other than accidents. Besides, there is also a one or two years waiting period for diseases like cataract, hysterectomy etc. And for other diseases which may have been existing prior to taking the policy commonly known as pre-existing diseases, the waiting period is for four years.
In simple words, policyholders will no longer be compelled to renew their health policies with their existing insurance company for fear of the waiting period starting all over again. As and when Irda introduces the portable health product in the market, customers who opt for such products will have the freedom to shift insurers without worrying about losing their continuity benefits.
Senior citizens, in particular, will benefit since they will find it difficult to shift their insurer if they are unhappy with their present one, as other companies would be reluctant to offer them new policies.
The introduction of a portable health product would also prove beneficial to insurance companies. This could act as a powerful product to approach the new customer segment hitherto untapped. And with competition, insurance companies would be thriving to continuously improve their efficiency standards in terms of customer engagement and relationship to ensure that the customers do not move away from them citing service deficiency.
In the current market scenario, it is very difficult to make a price comparison between products with exactly the same features. For customers who are price sensitive, opting for a health product with a lower premium might actually harm them at a later stage when they realise that the product features and terms & conditions do not cover (fully or partially) some of the ailments/conditions for which they have actually purchased the health product in the first place.
Portable health product on the other hand would have exactly the same features and terms & conditions and therefore a person intending to buy a portable product has to just compare the price before opting for the insurance company of his choice.
