Todays’ world is fighting with various critical health issues, and financial uncertainty where having a health insurance is a way of ensuring the safety of your loved ones. When buying health insurance, one of the key factors to consider is the claim settlement ratio of health insurance companies. The claim settlement ratio is the percentage of claims paid out by the health insurance company to the policyholder compared to the total number of claims received. It is an essential indicator of the insurer’s financial strength and reliability.
In this blog, we’ll look at why the health claim settlement ratio is important when buying medical insurance, what is an incurred claim ratio, and which health insurance companies have the best claim settlement ratios.
What is the Health insurance Claim Settlement Ratio?
The claim settlement ratio is the percentage of claims an insurance company pays out against the total number of claims received in a particular period. Generally, the higher the claim settlement ratio, the better the insurer’s financial strength and reliability. The best claim settlement ratio in health insurance in India implies that the maximum number of claims are being settled.
For example, if an insurance company has a claim settlement ratio of 90%, it means that out of every 100 claims received, 90 were paid out successfully. It is important to note that the claim settlement ratio may vary from year to year, depending on the number of claims received and the amount of claims paid out.
What is an Incurred Claim Ratio in Health Insurance?
An incurred claim ratio is the ratio of claims paid out by an insurance company to the total premiums collected by the insurer. It measures how much money the insurer has provided in claims payments to policyholders. Generally, the higher the incurred claim ratio, the more reliable the insurer is.
For example, if an insurance company has an incurred claim ratio of 90%, it means that out of every 100 premiums collected, 90 were used to pay out claims.
Why is the Claim Settlement Ratio Important?
The settlement ratio is an important indicator of an insurance company’s financial strength and reliability. It gives you an idea of how likely your claim will be paid out in the event of an emergency.
Moreover, the claim settlement ratio also gives you an indication of the insurer’s customer service. A higher ratio of claim settlement implies that the insurer is not only financially strong but also reliable and responsive in terms of customer service.
Benefits of Considering Claim Settlement Ratio when Buying Health Insurance
Here are some benefits of considering a higher settlement ratio:
- Understands the Insurer’s Performance: Claim settlement ratio reveals the insurer’s performance in settling claims. A higher ratio means the insurer settles more claims. This helps the customer to understand the insurer’s performance in terms of settling claims.
- Helps in Decision Making: Claim settlement ratio helps the customer make an informed decision while purchasing a health insurance policy. A higher CSR indicates that the insurer is prompt in settling the claims.
- Assures Prompt Claim Settlement: Customers can be assured of prompt claim settlement if they consider the claim settlement ratio while purchasing a health insurance policy. A higher CSR indicates that the insurer is prompt in settling the claims.
- Helps in Comparing Insurers: Claim settlement ratio helps compare the performance of different insurers. This helps the customer to select a health insurance policy from the best insurer.
- Evaluates the Efficiency: Claim settlement ratio helps evaluate the insurer’s efficiency in settling the claims. A higher ratio indicates that the insurer is prompt and efficient in settling the claims.
Tips to Choose the Right Health Insurance with a High Settlement Ratio
The medical insurance plans claim settlement ratio is an important factor when buying an insurance policy. It is a measure of the insurer’s financial strength and customer service. Moreover, it also gives you an indication of how likely it is that your claim will be paid out in an emergency.
Here are some tips for selecting the policy with a higher settlement ratio:
- Check the claim settlement ratio
- Look for a lifetime renewability option
- Check for add-ons and riders
- Compare premiums and coverage
- Check the exclusions.
- Check the network of hospitals
The higher claim settlement ratio of a health insurance policy is indicative of its financial strength and its ability to honour claims. It is an important factor to consider while choosing an insurance policy and should not be overlooked. This is because it will enable the policyholder to receive a higher claim amount in case of a claim. Therefore, looking for a policy that offers a high claim settlement ratio is essential to ensure that the policyholder will receive the full value of their claim on time.
