Should you port your old existing health insurance policy to a latest policy offering many more features?

A lot of people have insurance policies from nationalized companies or other private companies that were purchased 5 to 10 years ago or even earlier. At that time, insurance policies were very standardized and major choice that had to be made was about the insurance coverage amount.

Over the past few years private insurers have come with policies having very innovative features that cater to different needs and requirements of various groups. In this article, I am going to discuss a few innovative features, that Clients need to check if their policy offers, and in case those features are relevant for them, it is time to port their policy to a new age policy offering these features.

1)      Policy coverage multiplier: Older policies had a feature of no claim bonus of 10 to 20% per year. This meant if you had a policy of INR 10 lakhs, every year of having no claims would increase your coverage by INR 10 to 20 lakhs upto a specified upper limit. Latest policies of few companies provide coverage increase of upto 100% per year for specified number of years. This feature ensures your coverage increases multi-fold to counter the high rate of medical inflation.

2)      Restore benefit: If your health policy has a restore benefit, it would mean if your coverage extinguished with one hospitalization during the year, the policy coverage would be restored to its original amount in case of another hospitalization during the year. Some policies give a restore benefit once during the year while some offer the benefit multiple times during the year. In older policies, if you had a coverage of INR 5 lakhs and if your first hospital bill was INR 5 lakhs, your coverage for the remainder of the year would be zero. In a policy with restore benefit, your coverage after first hospitalization would again be reset to INR 5 lakhs. This feature is valuable for a family floater policy where multiple members could get hospitalized more than once in a year.

3)      Coverage for consumables: Expense on items such as gloves, cotton, masks, syringes, PPE kits, etc were never re-imbursed in older insurance policies. New age insurance policies cover these expenses as part of the policy or have to be taken as an add on. If consumables are covered, there is a good chance you may not have to shell out any money for your hospitalization.

4)      No cap on room rent limit: This is a critical feature which ensures the Client does not have to pay out of his pocket during hospitalization. In older policies, especially from nationalized insurers, there was a capping on the room rent which was typically 1% of the insured amount. This meant if you had a policy of INR 3 lakhs, you could take a room of only upto INR 3,000 rent. If the room rent was exceeded then Client would have to pay proportionately for the entire hospital bill even if the overall claim was under INR 3 lakhs. Latest policies instead specify the room you can rent i.e. single private A/C room, deluxe room, etc and the rent does not matter. In some policies there is no restriction on class of room selected. This ensures, even after a few years when room rents have increased, it would not impact the Client as far as the hospital bill is less than the insurance coverage.

5)      Premium lock: Premiums increasing every year or a few years once you cross an age bracket is very frustrating especially when you have not made any claims. With this feature, your premium gets locked at your age of entry until you make a claim. This helps saving on medical insurance premiums and is also very relevant for professionals who have a good corporate insurance and are expected to make claims from their private insurer only when limit of their corporate insurer expires.

6)      Robotic surgeries / Organ transplant: Robotic surgeries though not very prevalent right now, could become more common given the pace of technological advancements and adoption of AI. Organ transplant rate is also increasing with advances in medical technology. Given this, it is better to have a policy that covers robotic surgeries and organ transplants which the older policies would not have a provision for or have a sub limit.

7)      Day Procedures: A lot of older policies have a condition that for claiming reimbursement, it is essential to have an overnight hospital stay. Medical advancement has made it possible to have a small procedure being done during the day and patient being discharged the same day; latest insurance policies do provide insurance coverage for such day procedures as well.

Apart from this, there are many more features as well such as air ambulance coverage, Aayush treatments, attendant expense reimbursement, number of days coverage for pre and post hospitalization, domiciliary treatment, etc which are being offered in the latest plans of insurance companies. It is essential for Clients to not just sit on their old policies but when time comes for renewal, they re-evaluate their coverage and also the policy features. Please note, it gets very difficult to port your policy if you have got hospitalized during the year or developed any medical condition.

Also, just do not go for a policy with maximum number of features and low price. The most important elements are the claim settlement history of the insurer, complaint ratio and customer service. Insurers that satisfy these basic elements should be evaluated for their features and pricing.

I had written this article for www.freefincal.com and it got published on 23-04-2025