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Three years ago, Mumbai-based Ashish Shah bought a family floater health cover for Rs 5 lakh. This year, he was in for a shock when his insurer decided to raise the premium from Rs 5,415 to Rs 26,719 despite the fact that he had made no claims.

But Shah did not want to let go of the policy because he had completed three years, the period after which specific diseases, such as hernia, cataract, dysfunctional uterine bleeding, are covered. He was also just one year short of getting a cover for other pre-existing conditions. What was Shah to do?

He needn't have worried. With health insurance portability likely to come into effect from 1 July this year, there may be respite for people like Shah. Portability allows you to carry over the pre-existing disease (PED) benefits in your previous policy to the new service provider.

This was one of the biggest deterrents for switching because the customer had to serve the waiting period all over again and PED claims were covered only after a waiting period of 2-4 years. However, Irda has waived this condition, making for a smooth shift to a new insurer provided the previous policy has been maintained without a break.

When to move

You can look for a new insurer not only because of a sudden jump in premium but because a job shift has landed you in a place where the coverage of the existing insurer is inadequate. "People shifting from one place to another face problems due to lack of policy servicing at the new location," states Irda. Service standards, network of hospitals, lack of coverage in areas such as dental treatment, maternity benefits, etc, could also prompt you to shift.

Portability can be carried out only at the time of renewing a policy, not at any time during the year. However, it is advisable to approach the new insurer at least 45-60 days before the renewal date in order to ensure a smooth transition. Says Sanjay Datta, head of customer service, ICICI Lombard General Insurance Company: "A smooth sharing of data between insurance companies is a must to facilitate portability. For this, the industry wants to move to an IT-based platform for exchange of information regarding waiting period, existing claims, etc. The glitch is that all insurance companies don't have data that is online and in a standardised format."

If you don't start the procedure well in advance, there is a chance that you could go coverless for a certain period. "To avoid such a situation, one can look at a short-term extension of the policy. Besides, a 60-day period is given before a break in cover is considered," says Arun Mehrotra, head, retail underwriting & product development, Iffco Tokio General Insurance.

Insurance companies have been advised by Irda to acknowledge all applications for portability within three working days. Also, the previous insurer has been advised to share the policyholder's claim history with their counterparts within seven working days.