Job Loss & Health Insurance: Migration Rules You Missed
Imagine living in a beautiful, fully furnished house. It has everything you need—security, comfort, and safety. But there is one catch: it is a rented company accommodation. The day you leave your job, you have to vacate that house immediately. You cannot stay there even for one extra night.
Company Health Insurance: A Rented House
In today's volatile job market, layoffs and job transitions are becoming increasingly common. While we often prepare our finances and update our resumes, we tend to neglect the most critical aspect of our safety net: Health Insurance.
At Jeevan Bima Bazaar, we believe in empowering you with authentic, regulatory-backed knowledge. Many people vaguely know they can "keep" their policy, but they often confuse two very different legal terms: Portability and Migration.
This guide uses the official IRDAI Guidelines (Jan 1, 2020) to show you exactly how to convert your "rented" company policy into your "own" permanent asset.
Although this rule was Introduced in 2020, it is still fully in effect in 2026 and this is the rule that will protect you if you lose your job.
The "Company Umbrella" Myth
One of the biggest misconceptions among salaried employees in India is the belief that they are "safe." You might think, "My company provides a ₹5 Lakh floater policy; I don't need anything else."
Here is the harsh reality: That coverage is not yours. It belongs to your employer.
- The Rule: Generally, your coverage ceases on your Last Working Day.
- The Risk: If a medical emergency strikes the day after your last working day, you are technically uninsured. You will have to pay every single rupee out of your pocket.
The 2020 Game Changer: "Migration" vs. "Portability"
This is where most people—and even some agents—get confused. According to the IRDAI Guidelines on Migration and Portability (Ref: IRDAI/HLT/REG/CIR/003/01/2020), these are two distinct rights.
What is Portability?
Portability is when you switch from Insurer A (e.g., HDFC Ergo) to Insurer B (e.g., ICICI Lombard).
- When can you do it? Only at the time of renewal.
- Condition: You must apply 45 days before your policy expires.
What is Migration? (This is for YOU)
Migration is the right to transfer your credit (benefits) from one product to another within the same insurer.
- Why it matters for Employees: When you leave a job, you are moving from a Group Policy (Company) to a Retail/Individual Policy (Personal) with the same insurance company.
- The Law: The 2020 Guidelines explicitly state that members of a Group Policy "shall be provided an option of migration at the time of exit from group."
Key Takeaway: If you are leaving your job, you are technically looking for Migration, not Portability. You must approach your current insurance company to convert your group cover into a personal one.
Why Is This Important? (The "Credit" Benefit)
If you buy a fresh policy after quitting, you start from zero. You face:
- 30-Day Waiting Period: For all illnesses.
- 2-Year Waiting Period: For slow-growing diseases (Stones, Cataracts, etc.).
- 4-Year Waiting Period: For Pre-Existing Diseases (PED).
However, if you Migrate: You get "Continuity Benefits." If you were covered by your company for 4 years, and you migrate to a personal policy, those 4 years are counted. Your waiting periods in the new policy are waived off because you have already "served" them in the group policy.
Step-by-Step Action Plan (Do This BEFORE You Leave)
Timing is everything. Do not wait until you have the relieving letter in hand.
Step 1: Identify Your "Real" Insurer
Your company might use a TPA (Third Party Administrator) like MediAssist or Vidal, but the Insurer is the company paying the claim (e.g., New India Assurance, Star Health). Find this name on your E-Card.
Step 2: Write to the Insurer (Not just HR)
Send an email to the insurance company’s support team.
- Subject: Request for Migration from Group Policy to Individual Policy due to Job Exit.
- Statement: "I am exiting my company [Company Name] group policy on [Date]. As per IRDAI 2020 Guidelines, I wish to exercise my option to MIGRATE to an individual retail policy with continuity benefits."
Step 3: Complete the Formalities
- Underwriting: Unlike individual-to-individual migration, Group-to-Individual migration is subject to underwriting. The insurer can ask for medical tests and can decide the premium based on your health.
- Premium: Be prepared. Corporate premiums are subsidized. Retail premiums will be higher.
Step 4: Prepare for the "Premium Shock": Corporate vs. Personal Policy
When you shift (Migrate) from Group Insurance to Personal Insurance, the biggest surprise is often the Premium. Corporate policies are cheaper because the risk is distributed across thousands of employees and the company often subsidizes the cost. However, for a Retail (Personal) policy, you have to pay the standard market rate.
Use the table below to understand the potential difference for a 35-year-old individual (₹5 Lakh Coverage):
| Feature | Company Policy (Group) | Your New Policy (Migrated Retail) |
|---|---|---|
| Premium (Approx.) | ₹2,000 - ₹3,000 (Often paid by company) | ₹8,000 - ₹12,000 (You have to pay) |
| Waiting Period | 0 Days (Covered from Day 1) | Continuity Benefit (Your past years are counted) |
| Medical Check-up | Usually None | Possible (Depends on health status) |
| Room Rent Limit | Often No Limit | Limits may apply (Depends on plan chosen) |
| Co-Payment | None | Possible (To reduce premium cost) |
Note: The premiums mentioned above are estimates only. The actual premium will depend on your exact age, city (Zone), and medical history.
Step 5: Pay Before the Last Day
Ensure the process is completed and the premium is paid before your last working day to avoid a "break in insurance." A single day's gap can disqualify you from continuity benefits.
Essential Documents Checklist
Before you email the insurance company or visit their branch, keep these documents ready. Having a complete set ensures your Migration request is processed quickly without rejection.
- Migration/Portability Request Form: You can download this from the insurer’s website or ask an agent/branch officer for it.
- Certificate of Insurance (COI): Your current Group Policy certificate or Health Card mentioning your Member ID and coverage details.
- Relieving Letter / Resignation Acceptance: A mandatory document to prove you are leaving the employment and exiting the Group Policy.
- KYC Documents (Age & ID Proof): Pan Card and Aadhaar Card for all family members proposed to be covered.
- Claim History (If any): If you have made a claim in the last few years, keep the Discharge Summary and previous settlement letters handy.
- Fresh Proposal Form: Since you are moving to a retail policy, you will need to fill out and sign a new proposal form declaring your current health status.
Important Official Resources
To help you navigate this, we have curated the official government links and documents.
1. Verify on the Government Website
For a clear understanding of your rights regarding Portability and Migration, you should visit the Policyholder website managed by IRDAI. This page explains the 45-day rule and your rights to credits for pre-existing conditions.
Loading...2. Download the IRDAI 2020 Guidelines (PDF)
This is the authentic circular that mandates insurers to offer you Migration options upon exiting a group.
Download Official Document- Title: Guidelines on Migration and Portability of health insurance policies (2020)
- Issued By: Insurance Regulatory and Development Authority of India (IRDAI)
- Date: 01-01-2020
- Description: This PDF contains the exact legal text (Ref: IRDAI/HLT/REG/CIR/003/01/2020) confirming your right to migrate from a Group Policy to an Individual Policy.
Preparing download...
Download
Risk Note: Where to Be Careful
While the law protects you, there are practical hurdles you must know:
- Underwriting Risk: The insurer cannot deny you the right to apply, but they can reject the proposal based on "Underwriting Guidelines" if your health status is very poor (High Risk). It is not a guaranteed acceptance like COBRA in the US.
- Ayushman Bharat Misconception: Do not rely on government schemes like Ayushman Bharat unless you are below the poverty line or meet specific SECC criteria. Corporate professionals usually do not qualify.
- The "Break" Period: If you forget to pay the premium and your company cover ends on the 31st, and you try to pay on the 2nd of the next month, your continuity benefits might be lost. Zero gap is the goal.
Conclusion
Losing a job is stressful, but losing your health cover is dangerous. The "Rent vs. Buy" logic applies perfectly here. Your company policy is a rented house; a personal policy is your own home.
Your Action Item Today: If you are currently serving a notice period, stop reading and email your insurer now. Use the word "Migration" (not just Portability) to ensure they process your request correctly under the 2020 norms.
If you are an agent reading this, educate your clients about the "Migration Option". You aren't just selling a policy; you are saving their accumulated bonuses and waiting periods.
Frequently Asked Questions (FAQs)
HR refers to the "Group Policy" which indeed you cannot continue. But under IRDAI 2020 Guidelines, you have the right to Migrate to a retail policy with the same insurer. You should deal directly with the insurer, not just HR.
It is difficult. Usually, you first have to Migrate to a retail policy with your current insurer (same company). After holding that policy for 1 year, you can then Port to a different company (like moving from Star to HDFC) at the time of renewal.
No. Companies get bulk discounts. Your new "Migrated" policy will be charged at standard retail market rates, which will likely be higher.
You can check the Policyholder.gov.in website or download the IRDAI 2020 PDF linked in the article above.
If you migrate, the years you spent in the company policy will count. If you completed 4 years there, your waiting period for Diabetes in the new policy might be zero (subject to underwriting acceptance).
Disclaimer:
The information provided in this article is for educational purposes only and based on the IRDAI Guidelines dated Jan 1, 2020. Insurance rules are subject to change. Please consult with a certified insurance advisor or the insurance company directly to understand the specific terms, premiums, and underwriting norms applicable to your unique health situation.
No comments:
Post a Comment
Please do not enter any spam link in the comment box.