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Health Insurance Claim Settlement Ratio

Understanding the health insurance claim settlement ratio of any policy is important when you are buying a policy. This ratio is a representation of the percentage of claims that the insurer has successfully settled compared to the total claims they received. A higher CSR indicates the reliability of the insurer in processing claims.

When selecting policies, it is always advisable to opt for the ones with the best claim settlement ratio in health insurance. ...Read More

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Health Insurance Claim Settlement Ratio

Health Insurance Claim Settlement Ratio in India

Health Insurance Claim Settlement Ratio in India
October 14, 2024

Table of Content

 

Claim Settlement Ratio in Health Insurance

The claim settlement ratio of health insurance serves as a vital metric for investors to evaluate the reliability of an insurance provider. This ratio reflects the percentage of claims resolved out of the total claims filed within a specific financial year. A higher claim settlement ratio indicates that the insurer is more consistent in honouring claims — an important consideration when choosing a policy. 

A good policy that covers critical illnesses helps take away significant financial burdens at the time of illness. It could cover a range of expenses, including ambulance expenses, hospitalisation, surgery, medical care or assistance at home, and everyday review expenses as well. 

Health insurance companies are likely to have a good claim settlement ratio (CSR) if all claims are settled within three months of being filed. By reviewing this ratio, policyholders can make informed decisions, ensuring they select an insurer with a proven track record of settling claims efficiently and fairly.

Why is the Claim Settlement Ratio (CSR) important in health insurance?

Here are some reasons that make the health insurance claim settlement ratio a very important factor to consider:

  • It reflects the company’s ability to handle insurance claims.

  • It is an important consideration when comparing the efficiency of different insurers in the claim process.

  • It indicates the consistency of the insurer in claim approval.

  • It highlights the reliability of the insurer in the claim settlement process.

What Does Incurred Claim Ratio (ICR) Mean in Health Insurance?

The Incurred Claim Ratio (ICR) is another important indicator in evaluating different plans and policies for health insurance. It complements the claim settlement ratio of health insurance by revealing the proportion of premiums that the insurer uses to pay out claims. A balanced ICR suggests that the insurance company is efficiently managing its resources while still meeting its obligations to policyholders. This metric, along with the claim settlement ratio, provides a complete picture of how reliable an insurer is and their financial health.

For example, if a health insurance company has an ICR of 75%, it means that for every INR 100 collected as a premium, the insurer spends INR 75 on settling claims. The remaining INR 25 goes towards the administrative costs and profit of the company.

How to Settle a Health Insurance Claim

Settling a health insurance claim involves understanding the process thoroughly. Whether you have opted for a cashless or reimbursement claim, you must be aware of the process for seamless proceedings. If you are aware of how claims are settled, it will help you receive a timely claim payout during medical emergencies and maintain smooth communication with your insurance provider.

Cashless Claim

A cashless claim is possible when the insured gets treated at one of the insurance provider's networked hospitals. Here are the steps involved in a cashless health insurance claim:

Step 1: Claim Intimation

Immediately notify your insurer/TPA about the medical emergency. In case it is a planned treatment, it is best to inform atleast 72 to 48 hours prior to getting hospitalised or as mentioned in your insurance guidelines. In case it is an emergency hospitalisation, you must inform the company within 24 hours of getting admitted. Provide the necessary details to initiate the claim process without delay.

Step 2: Documents Approval

Submit all required documents to the insurer for review. You must produce your health card at the hospital along with the identification proofs so that the same can be used to confirm your identity. These are then used to fill out and send the pre-authorisation form to the TPA. Accuracy and completeness are crucial at this stage to avoid any delays.

Step 3: Claim Settlement

Upon approval of the documents, the insurer/TPA directly settles the hospital bills. This helps prevent any immediate burden on you as far as the medical expenses and treatment bills are concerned.

Reimbursement Claim

A reimbursement claim is necessary when an insured receives medical treatment at a healthcare facility outside their insurance provider's network. However, even when admitted to a network hospital, clients have the option to choose reimbursement instead of cashless payment. In such a case, the insured bears the immediate costs of treatment and then files for reimbursement of the same by the company. Here are the steps involved in a reimbursement health insurance claim:

Step 1: Claim Intimation

Inform your insurer about the treatment as per their mandated timelines. Keep all the required documents, along with the medical bills, ready when you file for reimbursement after the treatment is completed.

Step 2: Documents Approval

Submit all relevant medical bills and documents, including the claim form, to your insurer for verification. By ensuring everything is in order, you can facilitate a smoother process.

Step 3: Claim Settlement

Once the documents are verified, The Insurer decides on claim decision. Claim can get approved or rejected. If the claim is approved. The insurer reimburses the approved amount to your bank account. This allows you to recover your out-of-pocket expenses promptly.  

Documents Needed for Claim Settlement

Here is a list of documents usually required for claim settlement:

  • Claim form, filled carefully and correctly

  • The identification proof(s) of the claimant

  • Doctor’s certificate

  • Doctor’s prescription and invoices from the hospital or the pharmacy related to the same.

  • A copy of the FIR is required in cases of accident 

How to Verify Health Insurance Claim Settlement Ratio?

It is important to check the claim settlement ratio of health insurance provider before you buy a health insurance plan. This is because a medical emergency is stressful by itself, and getting into a problematic claim settlement procedure where you are discovering fine print and clauses at the last minute can only worsen the situation. Facing a claim rejection at such a crucial time can be even worse. 

It is, therefore, important to research well, have a fair idea of the health insurance claim settlement ratio, and select only from a shortlistthe one with the best claim settlement ratio in health insurance. 

Here is how you can verify the same:

  • Check the yearly updated report by IRDA (Insurance Regulatory and Development Authority), which also mentions the latest CSR of different health insurance providers.

  • If you have already shortlisted a few companies, check their IRDA updated claim settlement ratio. Always go with the most recent updates. 

  • Write down the health insurance companies with high claim settlement ratios. The higher the CSR, the better the chances of getting a speedy claim settlement during medical emergencies. 

  • Always do a thorough health plan comparison and check the health insurance coverage offered by the top companies on your list in detail. Look into the riders2 available and exclusions, if any, before you select the plan.

A plan with a poor health insurance claim settlement ratio will defeat its own purpose if it does not come in handy when you need it the most. Hence, do your research and verify in detail before selecting the plan you want to invest in.

Tips for Choosing the Best Health Insurance Company

Choosing the right health insurance company is important to ensure you get the best protection for yourself and your family. Here are some tips that will help you select the most suitable health insurance company for your healthcare needs:

Types of Health Insurance Plans

When selecting a health insurance company, it is a must to look at the benefits of health insurance being offered. Go for companies that provide a broad range of plans — individual, family floater, senior citizen, and critical illness plans. This is because such companies are more likely to meet specific needs better. Evaluate the different coverage options available and read the fine print on hospitalisation, pre- and post-hospitalisation expenses, exclusions, and additional benefits like maternity coverage or wellness programs.

Cashless Hospitals

Always go through the hospitals on the insurance company’s network before you finalise a plan. Having tie-ups with reputable hospitals is important as hospitals within the network ensure cashless claims. Also, you must ensure you get the quality of care you seek during emergencies. A company with a wide network of hospitals is always better. You can receive treatment without worrying about upfront payments, as the insurer settles the bills directly with the hospital. 

Claim Settlement Ratio

The claim settlement ratio of health insurance companies is a very important factor indicating its reliability. A higher claim settlement ratio suggests that the insurer is more likely to approve and pay out claims efficiently. Always choose a company that has a consistent and high claim settlement ratio so that your claims are processed smoothly and without unnecessary delays.

Customer Support Service

A company that has a prompt and helpful customer support service is more likely to offer a hassle-free experience. If the insurance company has knowledgeable customer service, you will get detailed assistance without any time wastage. When shortlisting, you must consider insurers that offer 24/7 customer support, a multi-channel approachability through phone, email, and chat and a reputation for resolving issues promptly.

Claim Procedure

Understanding the claim procedure is a must before you commit to a policy. A straightforward and transparent claim process can save you a lot of stress during emergencies. Look for insurers who favour simple and clear processes with minimal paperwork. Also, check if your provider offers both cashless and reimbursement options for greater flexibility depending on the situation.

Insurance Company Ratings and Reviews

Before finalising your choice, you must review the ratings and customer feedback of your insurance provider. You can check ratings from independent rating agencies as well, which are mostly done on the basis of financial stability, customer service, and claim settlement efficiency. Also, make sure that you read customer reviews for insights into other policyholders’ experiences. This will help you assess the overall reputation of the company. 

Summary

When selecting a health insurance company, consider factors such as the types of plans available, the network of cashless hospitals, and the health insurance claim settlement ratio. By assessing these aspects, you can choose a provider that offers reliable coverage and efficient claims handling. Extend this approach even when you are considering broader options, such as a Life Insurance plan. This will help you gain comprehensive financial protection that meets your needs well.

FAQs on Health Insurance Claim Settlement Ratio

Q. Which health insurance has the best claim settlement ratio?

The health insurance company with the best claim settlement ratio is the one that consistently settles the highest percentage of claims compared to the total number of claims received. This ratio can vary annually, so you must review the latest report.

Q. What is a good incurred claim ratio for health insurance?

An incurred claim ratio (ICR) between 80%-100% is considered to be good in the health insurance sector. 

Q. How many public health insurers are available in India?

India has four main public health insurers — New India Assurance, United India Insurance, Oriental Insurance, and National Insurance Company. These government-owned companies offer many health insurance policies that offer coverage for various medical expenses.

Q. How long does it take to settle health insurance claims?

As per IRDAI, an insurer must settle or reject a health insurance claim within 15 days of filing it. Except for cases warranting investigation.

Q. What is the difference between a claim settlement ratio and the incurred claim ratio?

The claim settlement ratio indicates the percentage of insurance claims an insurer successfully settles out of the total claims received, reflecting their reliability in paying claims. In contrast, the incurred claim ratio (ICR) measures the percentage of premiums collected by the insurer that are spent on settling claims, showing how much of the premiums are used for pay outs versus administrative costs and profit.

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Francis Rodrigues Francis Rodrigues

Francis Rodrigues has a decade long experience in the insurance sector, and as SVP, E-Commerce and Digital Marketing, HDFC Life, manages the online sales channel, as well as digital and performance marketing. He has had hands-on experience in setting up sales channels and functional teams from scratch over a career spanning 2 decades.

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Vishal Subharwal Vishal Subharwal

Vishal Subharwal heads the Strategy, Marketing, E-Commerce, Digital Business & Sustainability initiatives at HDFC Life. He is responsible for crafting and ensuring successful implementation of the overall organisation strategy.

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