When buying a new or renewing a term insurance policy, it’s important to assess the insurance provider’s latest claim settlement ratio (CSR) alongside the plan’s premium and coverage. The CSR is essentially a key indicator of the insurance company’s efficiency in settling customer claims and represents the claims paid out against the total claims they get in a fiscal year.
The Insurance Regulatory and Development Authority of India, the governing body for insurance in India, recently published the CSR for registered insurance providers in its report. The purpose of the plan is to financially protect the insured’s dependent in case of the policy buyer’s sudden hospitalization or medical emergency. The ratio plays a crucial role in ensuring the insured or their nominee will access the desired payout. A health insurance claim settlement ratio reflects that the insurer is capable of meeting its obligations to the policy buyers and helps them access the promised sum in case of medical need.
A Short Definition of Claim Settlement
The health insurance claim settlement ratio (CSR), or claim paid ratio, is a vital metric that helps measure the total insurance claims settled by the provider in a given year.
Typically, a high CSR of 90% or above, reflects the insurance company’s ability in successfully resolving a large share of claims it received in a year. This makes it crucial to check the CSR before buying or renewing a health insurance plan. Evaluating the ratio is important and individuals must prioritize checking it just like the premium amount, coverage, or exclusions. By practicing this, they will be able to understand whether the insurer is capable of fulfilling their promise to policyholders. The information will help individuals make an informed decision about the plan and the provider and offer them peace of mind that their dependents will be able to access the sum insured in case of a health emergency and meet the cost of treatment without much hassles.
What does the Claim Paid Ratio Indicate?
The claim paid ratio by amount offers a clear understanding of the insurer’s claim settlement practices. It provides an idea of more than the percentage of the claims settlements. In other words, it helps gain insight into the actual amount of money the insurer disbursed in a year for settling claims. Usually, a high ratio suggests that the insurance company has settled a large portion of insurance claims and paid a substantial amount of money in the process. This ratio suggests the commitment of the policy provider towards meeting the obligations it has towards its customers. On the other hand, a low ratio by amount can raise doubts about the insurer’s approach to settling claims. It could indicate that the insurer typically denies or downplays claims by paying a lower amount. Those seeking an insurance company with a positive record of settling claims on time and in full should check these ratios for their peace. They must also check factors like claim settlement process, settlement duration, and customer services to ensure the process is hassle-free and can be completed quickly.
Individuals can check the claim settlement ratio (CSR) on the official website of the insurance company. This empowers potential policy buyers to make informed decisions about the policy provider and purchase a plan from them accordingly.
By comparing insurance features and health insurance claim settlement ratio of different insurers, individuals can easily analyze the insurance provider’s effectiveness in meeting their customers’ needs. With the available information, individuals can make suitable decisions and build their contingency financial and health corpus more effectively. Usually, a low claim settlement ratio indicates a high likelihood of getting health insurance claims rejected or delayed.
This is why it is advised to select a policyholder with high CSR to ensure their claims get settled as and when needed and without much hassles.
How Can You Check the Claim Settlement Ratio
The Insurance Regulatory and Development Authority shares a report of the insurance industry year. The report contains information about the industry, and the performance of insurers, and has key details including –
- The total number of health insurance plans sold in the given year
- The total health insurance premiums received in the year
- The claim settlement ratio of that year
Individuals can access this report and key insurer details on their official website. These details can be accessed for free and offer individuals insights into the insurer’s track record and more.
The main aim of purchasing a health insurance policy is to build a financial safety net for medical emergencies that they can access during a crisis. However, it should be noted that there is no certainty that the insurance claim will be settled. Consequently, it becomes crucial to conduct thorough research and analysis of the insurance company to assess their claim settlement record, quick settlement of the insurance amount, and maintain an efficient claim settlement processing system.
All these factors collectively underscore the value of the individuals scrutinizing the health insurance claim settlement ratio (CSR). Hence, before getting a health insurance plan, individuals must examine policy features, including critical illness cover, premium, sum assured, claim exclusions, settlement, and ratio. Understanding these key details can help individuals identify a suitable insurance company whose offerings match their specific needs. This approach allows the individuals to ensure that their dependents will be financially secure in their absence and will be able to meet their future and ongoing obligations without straining their resources.
Individuals can use an insurance calculator to determine the premium and coverage to understand which plan is suitable for their needs. Subsequently, they should check the insurance company’s track of claim settlement, insurance processing, and waiting period to understand their service and whether they can be relied on to avail of timely financial access during medical emergencies. In addition, they should also check the list of coverage exclusions and network hospitals to determine the plan and policy provider’s scope. Having an insight into these aspects will help them make an informed decision and meet their requirements.