Health is an asset that is more prominent than anything else. That's why we study health insurance and invest in it. It assures that our medical emergencies do not convert into financial difficulties, especially when you consider that hospitalization charges are increasing in India.
If you are looking to buy a policy, you should consider several factors. Few factors cover the insurance claim process, network hospital, quality of service, benefits, age limit, bonuses, etc. Though, choosing the right health insurance plans is essential. One key factor that is usually neglected is the health insurance "claims settlement ratio."
What Is The Health Insurance Claim Settlement Ratio (CSR)?
The Health Insurance Claim Settlement Ratio (CSR) is a metric utilized to evaluate health insurance companies. It is determined as a percentage and signifies the number of claims compensated by a health insurance company against the total number of claims recorded throughout the year. It helps clients compare with other health insurance companies and choose the best health insurance policy based on the ratio. Moreover, the leading health insurance claim settlement ratio ensures a high probability of getting a secure settlement on your claims.
The standardization of health insurance claim settlement was done by the Insurance Regulatory and Development Authority of India. It publishes the claim settlement ratios annually in the first month of every year. The health insurance claim ratio is the essential factor that individuals review while looking for a health insurance plan. A higher claim ratio assures a higher possibility of hassle-free claim settlement. Otherwise, if your claims are denied or delayed, then your main aim of investing in health insurance plans will be waste. So, you need to make sure that you choose a company with a high claim settlement ratio.
How To Calculate Claim Settlement Ratios
In legal terms, a health insurance provider's claim settlement ratio refers to the percentage of total insurance claims received by a health insurance provider that has been satisfactorily resolved. The declaration should be admitted by the insured and should be in line with the individual terms of the insurance plans. The mathematical formula applied by insurance service providers to calculate their claim settlement ratio is mention below-
Claim Settlement Ratio = (Total claims settled or paid)/ (Total claims received + Outstanding claims at the beginning of the year)
Why Is It Important To Choose An Insurer With A Higher Claim Settlement Ratio?
Following are the advantages of buying a policy from an insurer with a higher health insurance claim ratio-
• You can assess the reliability of the general insurance company and base your buying decision on it.
• It helps you know how the insurer handles the claims of the policyholders.
• If an insurance provider has a higher ratio, it means that a high number of claims are paid. This inspires confidence while getting an insurance cover.
Key Benefits Of Health Insurance's Claim Settlement Ratio
• A claim settlement ratio of 80% and above can help you ensure that you can depend upon the company to give the insured claim to the nominees of the guarantee.
• A good CSR provides customers a rustle of relief while getting insurance.
• It provides financial security to the family in the absence of a close person.
• Customers can effortlessly compare between two or more insurance companies.
However, the health insurance claim settlement ratio is not a perfect indicator of whether the insurance company is perfect for you or not. Their claim settlement ratio in the past couple of years should be taken into account. A steady claim settlement ratio reflects credibility, mainly the most influential factor when selecting a health insurance company.
In short, before deciding on a health insurance company, you should check out their claim settlement ratio. This will help you understand the company’s financial history, stability, and authenticity. When it comes to Kotak General Life Insurance, our CSR ensures hassle-free claim settlement to our customers and to know more information, you can visit Kotak General Insurance website.
Disclaimer: The content provided is for education and informational purpose only, none of the information contained in our blog amounts to any form of opinion or advice. Please go through policy related documents carefully or consult an expert before making any insurance-related decisions.