The saying “health is wealth” holds true in today’s world, where the entire planet is confronted with a pandemic. In such times, good health and caution are essential for navigating challenges. The significance of obtaining health insurance in India is emphasized by many, making it extremely important to have a safety net in the form of health insurance coverage.

However, choosing a health insurance policy can be a daunting task due to the countless plans available. Various well-known factors influence this decision, including the health insurance claim process, network hospitals, age entry limits, additional benefits, bonuses, and more. Yet, one vital factor that frequently goes unnoticed is the health insurance claim settlement ratio. Let’s explore why this metric is critically important and why it should be considered when purchasing a policy.

What is the Claim Settlement Ratio in Health Insurance?

Health insurance claim settlement ratio, commonly referred to as CSR, represents the ratio of claims settled against the total claims received by an insurance company. As a standard comparison metric, it simplifies the process of evaluating various insurance providers and helps streamline decision-making.

How to Calculate the Claim Settlement Ratio?

Determining the health insurance claim settlement ratio may seem complex, but there is no need for concern. The Insurance Regulatory and Development Authority of India (IRDAI) oversees insurance in India and releases an annual report detailing the claim settlement ratios of registered insurance companies across various sectors, including health insurance.

The formula for calculating CSR is:

Claim Settlement Ratio = (All claims settled or paid) / (Claims received during the year + Previous year outstanding claims)

For instance, if an insurance company settles 4,00,000 claims out of 5,00,000 claims made by customers, the health insurance claim settlement ratio would be 80%. This means that the insurer resolves 80% of the total claims submitted, while the remaining 20% are declined.

Why is it Crucial to Choose an Insurer with a High Settlement Ratio?

Acquiring a policy from an insurer with a higher health insurance claim settlement ratio offers several benefits:

• It provides insight into how efficiently the insurer manages policyholders’ claims.
• You can assess the reliability of the insurance company and make an informed purchase decision.
• A higher claim settlement ratio signifies that more claims are approved, instilling confidence when purchasing insurance coverage.

How Does Selecting a Policy Based on the Claim Ratio Benefit You?

Exploring your options based on CSR allows you to determine how effectively an insurer processes claims. When comparing two insurance companies with nearly identical features, the claim settlement ratio serves as a useful benchmark.

While evaluating health insurance plans and various factors among insurers, it is equally essential to consider the claim settlement ratio. The next time you seek health coverage, remember to factor in CSR to make a well-informed decision.