Given the continuously rising medical inflation and increasing instances of lifestyle diseases, health insurance has become a critical part of our life. If there were any scepticism around the need and relevance of health insurance, then the pandemic removed all the doubts from people’s minds.
While the significance of health insurance is widely known, you must know the factors to consider when choosing a health plan for yourself and your loved one. The health insurance claim settlement ratio is one such factor.
Here’s all you need to know about health insurance claim settlement and why you should take particular note of the health insurance claim settlement ratio when choosing a plan.
What is the claim settlement ratio?
The claim settlement ratio (CSR) is a percentage figure that shows how many claims were settled by an insurance company against the total number of claims made in a year. As a general rule of thumb, the higher the claim settlement ratio, the better. A high health insurance claim settlement ratio implies a higher probability of getting your health claim settled and reimbursed without any hassles.
Why claim settlement ratio is so important?
The claim settlement ratio is an important aspect of understanding how reliable the insurance company is. Here are some points explaining the significance of the claim settlement ratio:
- Indicator of the company’s ability to pay claims: Looking at the claim settlement ratio, you can have a fair idea about its capacity to pay the sum assured in case of a claim. An insurance company with a higher claim settlement ratio is financially healthy and stable.
- Insight on the consistency of the insurer: While buying a health insurance plan, it is recommended that you check not only the claim settlement ratio of the current year but also the last 3-4 years. This would help you understand if the health claim settlement of the company has been consistent or not.
- Reflects the integrity of the insurer: A higher health insurance claim settlement ratio implies that the insurance company honours its agreements. People buying a policy from the company can rest assured that in case of a legitimate claim, they will not be duped or tricked by the company.
- Parameter for comparison: While buying health insurance you should compare different plans offered by different insurance providers. Apart from coverage and premium configuration, you should check the claim settlement ratio of each insurer to evaluate their performance.
- Assurance for health cover: A high settlement ratio is a major indicator of an insurance company’s financial stability and integrity. In case of a medical emergency, the last thing you would want is a complicated claim settlement process.
How to check the claim settlement ratio of health insurance?
Now that you know how important it is to check the health insurance claim settlement ratio, you may be wondering how you can check the claim settlement ratio of different insurance providers. There are primarily three sources to check the health insurance claim settlement ratio. They are:
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Website of the insurance company
Based on research and comparison, shortlist health insurance plans that meet your needs and budget. Make a list of the companies you would like to buy a plan from. Once that is done, visit the official website of each shortlisted company and check their health insurance claim settlement ratio (CSR). Most likely the figure you see would be the latest ratio. Take note of the CSR of each insurance provider to compare later.
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Insurance aggregator’s website
Instead of checking the health claim settlement ratio of each insurance provider by visiting their respective official websites, you can check an online insurance aggregator’s website. Here, you will find the claim settlement ratio of several insurance providers. Make a list of the insurance providers with a high claim settlement ratio, check their health insurance products, and buy a plan that fits your need and budget.
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The IRDAI website
The Insurance Regulatory and Development Authority of India website publishes the claim settlement ratio of all the registered insurance providers in its Annual Report. This is the most authentic source for checking the claim settlement ratio of different health insurance providers. You will find the most accurate information in the IRDAI Annual Report.
Given that the claim settlement ratio is one of the most significant indicators of the financial integrity and stability of an insurance company, you must check the health insurance claim settlement ratio before you purchase a health insurance plan. While you can check the health insurance claim settlement of every insurer by visiting their website, it will be an extremely tedious task. On the other hand, checking the claim settlement ratio on a third-party aggregator website may not be exhaustive research. Some companies with a good claim settlement ratio and plans may not be mentioned on the aggregator’s website. It is best recommended that you make a list of the insurance providers that you think are best in terms of coverage and cost and check their health insurance claim settlement ratio in the IRDAI’s Annual Report.