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Claim Ratio Considerations When Buying a Health Insurance Policy

28 January, 2016

Healthcare costs are increasing at an alarming rate. According to available data, hospitalization for treating a critical illness can cost INR 5 lakhs and more. If you are not covered under an insurance plan, meeting these expenses can be difficult and can result in financial disasters.

Over 25 companies provide such insurance plans in India, with different premiums, features, and limits. Most people opt for policies with a lower premium, even if offered by a relatively unknown insurer. This can be a huge mistake, as an insurance plan is of no use if the claim is not settled or if there is a delay in settlement.

Claims Settlement Ratio

This is an important metric to consider while evaluating health insurance companies. This ratio provides information on the number of claims that were made during the year and how many of these were successfully paid. This ratio will provide an estimate on the possibility of your claim being settled if the need arises.

The claim settlement ratio is crucial while choosing the best health insurance plan. Buyers are advised to opt for a company with higher settlement ratio, even if they need to pay some extra premium.

Claims Rejection

Users must also closely analyze the claims rejection and closed claims ratio. In both these instances, the policyholders failed to receive the amounts on their claims. Several reasons are possible; presence of a pre-existing condition or failure to provide factual information. Nonetheless, if the ratio is higher than 10%, it is advisable to further analyze the reasons and if the ratio is consistently high, users are advised to choose a health insurance policy offered by another company.

Aging of Pending Claims

While a high settlement ratio is beneficial, one also needs to take into account the average time taken to settle the claims. Aging of pending claims will help you understand the efficiency of the settlement procedure. If there are more pending claims, you need to consider choosing another company.

Royal Sundaram is a leading insurance company in India and has enjoyed a fairly consistent high claims settlement ratio. The Lifeline health plan provides policyholders with several benefits, such as free medical checkups, hospital cash, and cashless hospitalization in a wide network of hospitals and nursing homes.

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