Health insurance is a critical financial tool providing individuals with monetary protection against unforeseen medical expenses. Health insurance policies cover the cost of medical treatment, hospitalisation, and other related expenses. However, choosing the right health insurance policy can be challenging, especially with the variety of policies available in the market. One of the crucial factors to consider when picking a health insurance policy is the claim settlement ratio.
What is the Claim Settlement Ratio
The claim settlement ratio is the number of claims settled by an insurance company against the total number of claims received. Simply put, it is the percentage of claims the insurance company has settled. A high claim settlement ratio indicates that the insurance company is reliable and efficient in settling claims, whereas a low claim settlement ratio indicates the opposite.
How is the Claim Settlement Ratio calculated?
The claim settlement ratio is calculated by simply dividing the actual number of claims settled by the total number of claims received by an insurer. For example, if an insurance company receives 100 claims in a year and settles 80 of them, the claim settlement ratio would be 80%.
Why is the Claim Settlement Ratio important?
The claim settlement ratio is an important factor to consider when choosing health insurance online. A high claim settlement ratio indicates that the insurance company is efficient in settling claims, which means that policyholders can expect timely reimbursements for their medical expenses. On the other hand, a low claim settlement ratio indicates that the insurance company may have a poor track record of settling claims, which could result in delayed reimbursements or even claim rejections.
How to pick the right health insurance plan?
Given the various plans on the market, selecting the right health insurance policy can be challenging. Selecting a policy that provides comprehensive coverage while remaining within your budget is critical. Here are some things to think about when picking a health insurance policy:
- Coverage: The first factor to consider when choosing a health insurance policy is the coverage offered. Look for policies that cover hospitalisation, diagnostic tests, surgeries, and other medical expenses. Plans that cover pre-existing conditions, maternity care, and critical illnesses are also vital to consider.
- Network of Hospitals: Investigating the insurer’s network of hospitals and healthcare providers is crucial. To ensure that you have access to quality healthcare when you need it, ensure that the policy covers a wide range of hospitals and clinics in your area.
- Premium Amount: This is the amount you pay periodically to keep the policy active. Choose a plan that fits your budget, and make sure to compare the premium amounts of different policies before making a decision, or you can use a health insurance calculator.
- Waiting Period: Most health insurance policies have a waiting period for certain ailments. Choosing a policy with a shorter waiting period is essential, especially if you have pre-existing medical conditions.
- Co-payment Clause: Some policies have a co-payment clause, where the policyholder needs to pay a certain percentage of the medical expenses. Check and compare this clause with the different insurers before making a decision.
- Renewability: Look for policies that offer lifetime renewability, as it ensures coverage for any medical emergencies in the future.
- Customer Service: Lastly, consider the customer service offered by the insurance company. Choose an insurer with 24/7 customer service and a user-friendly website and mobile application. Good customer service can help you resolve any queries or issues related to your policy.
CSR and ICSR: Know the distinction
CSR is the percentage of claims settled by an insurer out of the total number of claims received in a particular period. In contrast, Incurred Claim Settlement Ratio (ICSR) is the ratio of total claims paid out by an insurance company to the total premium collected during a particular period. ICSR is essential for insurers because it allows them to assess their performance and identify improvement areas. It also assists regulators and industry analysts assess insurers’ financial stability and ability to pay claims.
Understanding your health insurance policy and the claim settlement ratio is crucial for securing financial protection against unforeseen medical expenses. Choosing the right policy can be easier if you consider factors like claim settlement ratio, coverage, network hospitals, premium amount, waiting period, co-payment clause, renewability, and customer service.