By definition, term insurance portability allows the policyholder to switch to another insurance company without ending their existing policy. Despite the change in the insurance company, you will be eligible for the same benefits as before.

However, according to the Insurance Regulatory Authority of India (IRDAI), term insurance policies are NOT portable. Currently, it is only available for health insurance plans in India.

Why is Term Insurance Policy NOT Portable?

In India, implementing term insurance transfer presents several challenges, such as:

  1. Term plans with a duration of 10-30 years cover certain insurance risks. Therefore, the new companies will expect the old insurance company to cover any eventualities in the future.
  2. Depending on how both parties consider the future, their cost estimates may differ.
  3. Term insurance portability could also be complicated if the new company requests a different premium amount to pay.
  4. Standardizing product features before introducing portable term insurance will prevent mismatches between expenses incurred and premiums earned by the insurer.
  5. Several problems associated with uneven risk and expense will also be eliminated, which may negatively impact the market.
  6. As a customer, you will get policies that don't add any value.

The Way Forward

Term insurance portability can bring the following positive effects in India, addressed properly:

  1. There may be discussions with several stakeholders to implement a term insurance transfer that will ultimately be favorable to you as a customer.
  2. The greater transparency and competition will allow people to compare different products according to their needs. Also, the insurance company will focus on better customer service for customer satisfaction.

What to Do in the Absence of Portable Term Insurance?

In the absence of portable term insurance, as is the case right now, the following steps must be taken by the customers:

  1. Be wise and choose your policy carefully.
  2. Do a thorough research. First for your own needs and requirements. Second, for the insurance company you choose. Because later if you opt to discontinue your policy, the loss will only be yours.
  3. Utilize the free look-in period of 15 days from the date of receipt of the policy. This period is given to the policyholder to check the policy documents. You have to review the terms and conditions of the. You can always return the policy back in case you object to anything after having read it carefully. The insured will be allowed a period of at least 15 days (30 days in case of online policies). 1
  4. Your policy premium is returned back to you after cutting the corresponding premium charges for the respective time period. Charges towards stamp duty and medical examination, if conducted are also factored in.1

Suggested Read: 5 Mistakes to Avoid While Buying Term Insurance


Financial emergencies in your absence should not force your family to go bankrupt and beg from relatives. Hence, buy the right term insurance policy, for it plays a crucial role and helps you save tax too. To speak to our financial advisor, click here.