Health is a more critical asset than anything else. That is why we research and invest in health insurance. It ensures that our medical emergencies do not become financial difficulties, which is especially important given that hospitalisation costs in India are rising.
Several factors should be considered when purchasing a policy. A few factors include the insurance claim process, network hospital, service quality, health insurance benefits, age limit, bonuses*, etc. One of the most important factors that should not be overlooked is the claim settlement ratio.
What is the claim settlement ratio (CSR) for health insurance?
CSR is data used to assess the performance of health insurance providers. It is calculated as a percentage and represents the number of claims paid out by a health insurance company against the total number of claims filed during the year.
It assists clients in comparing health insurance companies and selecting the ideal health insurance policy based on the ratio. Furthermore, a leading health insurance claim settlement ratio ensures to a certain extent that you can receive a secure settlement on your claims.
The Insurance Regulatory and Development Authority of India standardised health insurance claim settlement. The claim settlement ratios are published annually by IRDAI. The health insurance claim ratio is one of the most critical factors when shopping for a health insurance plan.
A higher claim ratio increases the likelihood of a smooth claim settlement*. Otherwise, if your claims are denied or delayed, your investment in health insurance plans could be for nought. As a result, you must select a company with a high claim settlement ratio.
Calculating claim settlement ratios:
The CSR of a health insurance provider refers to the percentage of total insurance claims that have been satisfactorily resolved against the number of claims received.
The mathematical formula used by insurance companies to calculate their claim settlement ratio is as follows:
Health insurance claim settlement ratio = (Total claims settled or paid) / (Total claims received + Outstanding claims at the start of the year)
Why is choosing an insurer with a higher claim settlement ratio important?
The benefits of purchasing a policy from an insurer with a higher health insurance claim ratio are as follows.
- You can assess the health insurance company’s dependability and base your purchasing decision on it.
- It enables you to understand how the insurer handles policyholder claims. A higher ratio indicates that an insurance provider pays many claims. This gives you confidence when applying for insurance.
- A claim settlement ratio of 90% or higher can help you ensure that you can rely on the company to pay the insured claim to the assured nominees.
- Customers can easily compare two or more insurance companies. On the other hand, the health insurance claim settlement ratio could be a wiser indicator of whether the insurance company is right for you.
The claim settlement ratio of an insurance company over the last few years should be considered. A consistent claim settlement ratio reflects credibility, which is the most crucial factor when choosing a health insurance company.
‘Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms, and conditions, please read the sales brochure/policy wording carefully before concluding a sale.‘
*All savings are provided by the insurer as per the IRDAI approved insurance plan. Standard T&C apply
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