Porting a Five-Year-Old Floater After a Mid-Term Diabetes Diagnosis
Mr. Ramesh Nair, 47, has held a ₹10,00,000 family floater (self, wife, two children) with Insurer A since 1 April 2019 - five continuous renewals, never late, and two small claims (₹38,000 for dengue in 2021, ₹22,000 for a wrist fracture in 2022). At his 2023 check-up his HbA1c came back at 7.8% and his physician started metformin. He disclosed this at the 1 April 2023 renewal, and Insurer A applied its standard pre-existing-disease waiting period of 36 months running from that renewal. He has had no diabetes-related treatment since and is now 24 months into that waiting period. A friend has been quoted a 15% lower premium by Insurer B for a ₹10,00,000 floater, and Ramesh wants to port on 1 April 2025, applying about four weeks before his renewal date. Insurer B's product carries a 36-month pre-existing-disease waiting period, a 90-day specific-disease waiting period and a 30-day initial waiting period, and its proposal form directly asks whether any proposer has diabetes or is on regular medication.
1. Mr. Nair believes portability means Insurer B must treat his diabetes as already covered. Explain how Insurer B will classify the diabetes and how much of the 36-month waiting period he will still have to serve after 1 April 2025.
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Portability preserves continuity of coverage; it does not erase the condition or convert it into a clean risk.
- Classification. Insurer B's proposal asks about diabetes and regular medication, and the portability form from Insurer A will disclose the 2023 diagnosis and the metformin prescription. Diabetes is therefore a pre-existing disease under B's definition - it was diagnosed, and treatment was advised, before B's policy incepted. He must answer 'yes' on the form.
- Credit, not amnesty. What portability guarantees is credit for the waiting period already served. He has served roughly 24 months of the 36-month diabetes waiting under Insurer A, so on a strict carry-forward basis he should serve about 12 more months with Insurer B, not a fresh three years.
- The two short waiting periods (30 days initial, 90 days specific-disease) are also credited because coverage is continuous - they do not restart.
- Scope of the restriction. The residual wait affects only diabetes-related claims; an unrelated illness or accident is covered from day one of B's policy, subject to the credited waiting periods and the policy exclusions.
- Practical step. Do not let the A policy lapse before B issues its policy. Ask B for its underwriting decision on the diabetes waiting period in writing, and if it imposes a fresh 36 months, challenge it in writing citing portability credit before accepting the policy.
2. Suppose he lets the 1 April 2025 renewal lapse, waits 45 days and then buys Insurer B's policy as a new customer without mentioning the diabetes. Set out every consequence.
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This is the single most damaging course available, and the answer should walk through the consequences layer by layer.
- Portability is lost. Portability requires an in-force policy and an application before the renewal date. A 45-day break means he is simply a new proposer, so the full 36-month pre-existing-disease waiting period, the 90-day specific-disease wait and the 30-day initial wait restart from scratch.
- No cover in the gap. For those 45 days he has no health insurance at all - a hospitalisation in that window is entirely self-funded.
- Non-disclosure. Diabetes on a direct question is a material fact. Within the 60-month moratorium of continuous coverage an insurer may repudiate a claim and cancel the policy for misrepresentation. Because the diabetes is documented in his 2023 records, the suppression would be easily discovered on any claim investigation.
- Agent exposure. An agent who suggests or drafts a proposal omitting a known diagnosis is in breach of the IRDAI code of conduct and can face disciplinary action, quite apart from the client's loss.
- Cost. A fresh policy is priced at his then age, and if the diabetes progresses before underwriting he may face loading or a permanent exclusion that he would not have faced with carry-forward credit.
The honest comparison - a 15% premium saving against a restart of all waiting periods - almost never favours the lapse.
3. As his agent, what do you actually advise and what documents do you collect before 1 April 2025?
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Start with a realistic comparison rather than a premium comparison. If Insurer B credits the 24 months served, both insurers' diabetes clocks end at roughly the same date, and the 15% saving is genuine. If B refuses credit, the port is worse than staying, because A's 36-month wait ends around April 2026 while B would impose a fresh three years. Advise accordingly, and record the advice.
Documents to assemble before the deadline:
- The portability form obtained from Insurer A, which carries the coverage history, waiting periods already served and the claim record; follow up until A issues it, since the timeline for this sits with the expiring insurer.
- Renewal notices and premium receipts proving five unbroken years.
- All diabetes records: 2023 lab reports, prescriptions, and the current HbA1c.
- A proposal form completed with an unambiguous 'yes' to the diabetes and medication questions, with the details attached.
Sequencing matters: submit the portability proposal inside IRDAI's prescribed window before the renewal date, obtain Insurer B's written underwriting decision, and only then allow the A policy to expire. If B declines, tell him A must renew - refusal of renewal is permitted only on defined grounds such as fraud or misrepresentation, not simply because he is now a diabetic. Warn him in writing that a break in cover, or a cleared proposal, is worse than any premium saving.