Is your agent pushing you for health insurance portability? Read this first; it may be too good to be true

Health insurance portability allows you to switch insurers without losing your benefits. This means you keep your waiting periods already completed. You also keep your no-claim bonus from before.

Normally, buying a new policy means starting completely fresh. Waiting periods reset, and past benefits simply disappear. Portability was created to solve this exact problem.

The insurance regulator, IRDAI, introduced this rule years ago. It wanted to stop customers from feeling stuck with bad insurers. This was meant to encourage better service and fairer pricing.

In theory, the system sounds simple and fair. In reality, though, serious problems have surfaced recently.

Reporting by Mint Money found two major issues. The first involves how insurance agents actually use portability.

Sales Push

Instead of helping customers, some agents misuse the process. They treat portability as a way to earn money. Agents are sometimes paid to switch customers between insurers.

This is against the rules, but it still happens. Switching itself isn’t wrong when customers genuinely want better cover. The problem is when agents push switches for personal profit.

Industry data shows roughly one in four customers don’t renew. This comes from the most popular health insurance plans on the market. It isn’t clear if they switched insurers or dropped cover entirely.

Insurers believe many of these customers switched through portability. If agents are pushing this for commission, that’s concerning.

Some agents go further and sell an entirely-new policy. They present it to customers as if it were a port. Customers often don’t notice this trick until they file a claim.

By then, they may have lost their old benefits completely. This can mean facing unexpected waiting periods.

Lack of Transparency

The second big problem is a lack of transparency. Even after 15 years, IRDAI doesn’t share enough information.

Insurers don’t publicly disclose how many policies are ported each year. There’s no way to check if rules are being followed properly.

All porting requests should go through one central system. This allows new insurers to see your past claims history. This is meant to protect you when you switch.

But, there’s no data on claims rejected after porting. So, nobody really knows how often this causes problems for customers.

Questions arise if your new insurer rejects a claim based on old information. That information should already have been shared among insurers. If it wasn’t, someone failed to do their job properly.

Right now, portability seems fine as long as everything goes smoothly. The real problems only appear once you file a claim.

Without better transparency, these issues will likely continue. Portability should protect customers, not create new risks. Experts say clearer rules and public data could fix this.