By Tory Vance
Buying health insurance is easy, but buying the right health insurance that offers adequate coverage for you and your family could be tricky. To ensure you invest in the right plan, you must consider some factors when shortlisting policies.
The most crucial factor is coverage. Your health insurance policy must meet your medical needs in the face of an emergency. Second, the health insurance policy must fit into your budget. Third, always buy the policy from a trusted and reliable insurance provider who has a good health insurance claim settlement ratio. Why? Because a high health insurance claim settlement ratio is an indicator of the insurer’s prompt response to your claim request and a hassle-free settlement process.
Read on to know what health insurance claim settlement is and why it is so important.
What is a claim settlement ratio?
If you are planning to buy a health insurance plan, you must consider the insurance provider’s claim settlement ratio (CSR) before paying for the policy. It is one of the most authentic indicators of an insurance company’s financial stability and integrity.
The claim settlement ratio is a percentage figure that shows the number of claims settled in a financial year vis-à-vis the total number of claims received by the insurance company during that period.
A high health insurance claim settlement ratio implies that a significant number of claims received by the insurance company were settled successfully. It also means higher chances of hassle-free settlement for your claim as well. Thus, an insurance company with a high health insurance claim settlement must be preferred over one with a lower claim settlement ratio.
How does knowing the claim settlement ratio help?
By now you must have realised the significance of the claim settlement ratio. In case you still have some doubts, consider the following points:
- Shows the credibility of the insurer: A high claim settlement ratio is indicative of the insurance company’s credibility. It shows that legitimate claims are settled seamlessly by the insurance company. You can trust insurers with a high claim settlement ratio and buy health insurance plans from them.
- Shows the company’s financial capacity: A high claim settlement ratio not only reflects the integrity of the company but also its financial capacity. For successful health insurance claim settlement, the concerned insurance company has to have the financial strength to pay the sum insured. Without good financial health, insurance companies cannot honour their claim settlement commitment.
- Help in comparing insurers: Since the claim settlement ratio is an indicator of an insurance company’s financial capacity and credibility, you can use this ratio to check the performance of different health insurance providers. This comparison will help you find and finalise the right insurance provider.
- Security for you: The very purpose of buying health insurance is to stay protected against medical emergencies. Imagine a situation where your health insurance claim is rejected when you need it the most. The whole purpose of buying a health insurance plan will stand defeated. Consequently, you should try getting your health insurance plan from an insurer with a high claim settlement ratio.
- Helps identify the authenticity: You may come across a health plan provider that offers strikingly good and relatively way better coverage at extremely competitive prices. While you may be tempted to invest in a high-coverage, low-cost health plan, by looking at the claim settlement ratio you can determine if the insurance provider can be trusted or not.
What are the points to keep in mind while checking the claim settlement ratio?
Here are some points that you should keep in mind while checking the health claim settlement ratio of an insurance provider:
- Check the ratio from the IRDAI website
While you can always check the claim settlement ratio from the website of the insurer, it is best recommended to check the figure from the Annual Report of the IRDAI.
- Higher claim settlement ratio
When it comes to health insurance claim settlement or any other general insurance product, the thumb rule is—the higher the claim settlement ratio, the higher the probability of getting your claim settled.
- Claim settlement ratio should be consistent over years: When checking the claim settlement ratio (CSR) of an insurer, make sure to look for the information from the last three to four years. This would give you much-needed insight into the financial stability of the insurance provider. Choose an insurer with consistent CSR.
- Claim settlement amount: Apart from checking the ratio, check the health insurance claim settlement amount for the year as well. If a company settles several claims of smaller amounts and typically resists settlement of claims of a higher amount, even then it can have a high claim settlement ratio.
Checking the health insurance claim settlement ratio of a health insurance provider is one of the most authentic litmus tests to know the financial health and credibility of the insurance provider. In an hour of medical crisis, you would need a partner that will honour its commitment. You can ensure this by choosing an insurer with a high health insurance claim settlement ratio.
