Why is the Health Insurance Claim Settlement Ratio an Important Aspect for You to Know?

 When you are buying health insurance make sure you check the insurance company’s claim settlement ratio. What is a health insurance claim settlement ratio? It is the numerical representation of the company claim settlement capacity. With the ratio, you can find how many claims the company has settled in the previous year and is this company suitable for you or not. Read this post and know about health insurance claim settlement ratio importance.

Why should you Consider Health Insurance Claim Settlement Ratio?

The insurance company claims settlement ratio is one of the most important factors to consider while buying health insurance. Because if the company fails to settle the claims, the purpose of buying insurance will be wasted. Health insurance claim settlement ratio is the percentage of insurance claims an insurer has settled or paid out during a financial year. For instance, when a company paid 97 claims out of 100. Its claim settlement ratio would be 97%. 

Key Points About Health Insurance Claim Settlement Ratio

• An insurance company health insurance claim settlement ratio is calculated using the below formula 

Health Insurance Claim Settlement Ratio = Total Number of claims approved / Total Number of claims received

• Do check the company claim settlement ratio r for at least the past five years. And if there is no inconsistency and the claim settlement ratio is high, you can choose the insurer.

• You must know that the IRDAI publishes the claim settlement ratio of all the public and private insurers.

• Along with the health insurance claim settlement ratio know how big and old the insurance company is.

Advantages of Health Insurance Claim Settlement Ratio 

When you invest in health insurance you want protection and assurance against medical emergencies. But there are numerous cases of non-settlement or partial settlements. So the question is will your claims be settled in full? Would the insurance company reimburse the claims? This is when the health insurance claim settlement ratio helps you make an informed decision. The following are the benefits of a health insurance claim settlement ratio -

• You can know the insurance companies history and ability to settle claims 

• The ratio builds confidence to a certain degree 

• It helps you decide between two insurance companies

If you find a company with a good claim settlement ratio, you can be relieved from worries. Normally, 80% to 90% is considered a good health insurance claim settlement ratio. As it reflects the efficiency of an insurance company.

Why Do Claims Get Rejected?

You must understand that insurance companies cannot reject claims without a valid reason. Many times, it is the policyholders’ mistakes that lead to rejection. The following are some of the common reasons:

• Filing up incorrect details - While purchasing a policy, you must fill in every detail correctly. Don’t rely on the insurance agent to do it, you must do it yourself. 

• Hiding pre-existing conditions - You should be transparent about the details of your and your family’s health history at the time of purchasing and renewing a policy. 

• Incorrect Claim processes - An insurance company follows its guidelines for the claims settlement process, so you should read that before you proceed to it.

So when you are looking to purchase a health insurance policy, always compare the claim settlement ratio of the different insurance companies. And do check the total number of claims it has processed and paid. Because a bigger ratio means a better company. 

And you should know that a small or a new company receives a small number of claims in a particular year, and hence their claim settlement ratio is higher. So don’t rely wholly on the health insurance claim settlement ratio, because such a company may not be able to handle a large number of claims. Look into all the parameters and choose the company with the best consistent claim settlement ratio.