Understanding Claim Settlement Ratio in Health Insurance Policies

Health insurance companies with best claim settlement ratios above 90-95%.  Max Bupa, Care Insurance

Choosing the right health insurance policy can sometimes be difficult because there are so many options to choose from. This overabundance of options can confuse people, especially first-time buyers. Before investing in a health insurance policy, individuals should evaluate their needs and take into account certain factors such as their age, financial budget, and medical history. After considering your choice, you should compare and research the various plans available in the insurance market such as individual health insurance, health insurance plans for family, etc. You must compare the features and benefits of different plans and make sure it does not exceed your financial budget and meets your expectations.

There are several health insurance providers on the market that offer specialized health insurance policies to policyholders. Hence, you must pay special attention to the claim settlement ratio of an insurance provider to have the best policy and the best service. 

Understanding claim settlement ratio

The most important factor that buyers should keep in mind when looking for a good medical insurance provider is the claim settlement ratio. It determines the credibility of the company and their ability to resolve claims promptly in the event of a medical emergency. You should ideally consider health insurance companies with a claim settlement ratio of more than 80%. It calculates the ratio of total settled claims to the total number of claims received during the financial year. Let’s look at the basics of calculating a health insurance provider’s claim settlement ratio for a policy year:

The simplest formula for calculating a claim settlement ratio is:

CSR = Total claims settled / (Total claims received + Previous year’s carried over claims at the start of the year) 

Health insurance companies use the above formula to calculate their claim settlement ratio for the policy year. The best claims from the previous year are also included in the formula. Since the health insurance provider plays a key role in settling medical bills at the time of hospitalization, it is important to choose a health insurance provider wisely. That means measuring each health insurance provider on important parameters. * Standard T&C Apply

Why is a health insurance company’s claim settlement ratio important?

The claim settlement ratio is essentially the probability of your claim being accepted and approved by the insurance provider. The following are a few reasons that will determine the importance of taking into account the health insurance company’s claim settlement ratio when investing in an appropriate health insurance plan:

  • You should consider the Company Claim Settlement Ratio over the past five years to ensure that the company’s performance is consistent. It gives you confidence in their ability to resolve claims.
  • Based on IRDAI’s claim settlement ratio data, you can determine the health insurance company’s credibility. You can visit the official website of IRDAI for further details.
  • A company with a high claim settlement ratio is one that buyers feel confident about purchasing from.

* Standard T&C Apply

The claim settlement ratio helps determine the rate of claims settled by the health insurance provider during the policy year. It is important to buy a plan from an insurance company with a good claim settlement record because in times of medical emergency, you will be able to avail their plan without any hassle.

If you are planning to purchase a health insurance policy, then it is best to first learn what is health insurance and then acquire a policy. Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms and conditions, please read sales brochure/policy wording carefully before concluding a sale.