The Insurance Regulatory and Development Authority (IRDA) has approved the portability of existing health Insurance and new insurance policies from July-2011. This approval has paved way for policy holders to switch insurer and carry the benefits of the previous health insurance policy.
Health Insurance portability was not easy and profitable until now because the credit or weightage for the number of years under insurance with the previous insurer will be lost when an existing health insurance policy holder wanted to switch over from one insurance company to another.
By IRDA's order for portability of Health Insurance as detailed above, this difficulty has been sorted out now.
This credit/weightage is mainly required by a policy holder to get himself eligible for insurance claim in the case of health problems due to pre-existing diseases.
Heath Insurance is not a popular product in India as of now. This is mainly due to lack of awareness among people. But people have started to recogonize Health Insurance nowadays to overcome the escalating cost of medical treatment.
The portability ordered now by the IRDA will be favourable to a policy holder as he could switch if he is not satisfied with a particular Insurance Company.
On the point of view of an Insurance Company, the portability would though increase the competition, overall business could pick-up as more people would like to cover their health.