Health Insurance Claim Settlement Ratio
Health Insurance

Health Insurance Claim Settlement Ratio

Health Insurance Claim Settlement Ratio

Accidents and illnesses happen unannounced. If you are not prepared, you could end up spending all your savings to meet the medical expenses. Health insurance plans work like an umbrella on a rainy day and will provide coverage in case of an illness or accident. It will ensure that you enjoy the best medical treatment without burning a hole in your wallet. It is a must for individuals of all ages-groups.

However, before buying health insurance, you need to understand the terms associated with it. There are several factors that you must consider while buying a policy. One such important factor is the claim ratio. You need to understand what is claim ratio in health insurance, how health insurance claim settlement ratio works and what it represents.

Let’s take a look at it all in detail.

Types of claims ratio

Buying health insurance is quick and easy, but you must ensure that you choose the right type of policy for your needs. If you do not understand the terms associated with the insurance policy, you may not be able to make the right choice. You need to understand whether the company will settle the claim or not and you can check this by researching the claim ratio of health insurance companie. There are two types of claims ratio that you must be aware of - claim settlement ratio and claim incurred ratio.

Claim settlement ratio

The claim settlement ratio of health insurance companies is an important factor for you to consider. It is the ratio of the claims settled by the company against the total claims filed in a specific period. Let us take an example here. If the company has received 100 claims and it approves 89 of them, then its claim settlement ratio will be 89%. The remaining could be pending or rejected by the insurance company. The health insurance claim settlement ratio for any company will not be more than 100%. It is always a good idea to choose an insurance company that has a high claim settlement ratio. It shows that the company is healthy and accepts claims. When you buy health insurance from a company that has a high claim settlement ratio, it increases the chances of your claims getting accepted.

Claim incurred ratio

The claim incurred ratio is the proportion of the claims paid out against the amount of premium received by the company in a specific period. Let us take an example here. If the company has approved Rs. 70 crore of claims against Rs. 100 crore of premium received, the company’s claim incurred ratio will be 70%. In this case, a low ratio means that the company has a rigorous claim settlement process. No company can have a ratio higher than 100%. If the company has a 100% claim incurred ratio, it shows that it is making more payments towards claims and giving away more than it has received in the form of a premium. It is best to go with companies that have an incurred claim ratio between 80-90%.

At the time of buying a health insurance policy , it is possible to get confused about the two ratios and if you think that they are one and the same, you could end up making the wrong choice. As a buyer, it is important to ensure that the claim settlement ratio is high but also watch out for the incurred claim ratio. A very high or low ratio means something is not right with the company.

Importance of the claim ratio

The ratios will play a significant role in the health insurance company you choose. Understanding the ratios will help make the right buying decision. So, always emphasise on both the ratios when you choose a health insurance plan. It is important to know how safe and covered you are when you make a claim and whether the company will support your health insurance claim ratio or not.

However, these two ratios are not the only elements you should consider when buying health insurance. There are many other factors you need to keep in mind, such as sum insured, coverage of pre-existing conditions, waiting period, lifelong renewability and more. But keep in mind, a high claim settlement ratio is excellent for the policyholders as it means that the company settles a high number of claims and customers enjoy a higher degree of trust. If the claim settlement ratio is more than 100%, it is not ideal for the company.


Now that you know what is claim ratio in health insurance, keep it in consideration when purchasing the policy. You can also check it when you renew your health insurance policy. You will be able to find this information easily on the website of the insurance company. Consider all the factors and choose an insurance company that has the best claim settlement ratio in health insurance.

Health insurance is an important part of your investments, and it will secure your future. Compare different policies and keep your requirements in mind when choosing one. Do not base your decision simply on the premium amount. Research the market and look for policies that offer comprehensive coverage and have a high claim settlement ratio. The right health insurance policy will ensure that you and your loved ones are covered in case of an illness or accident and your finances remain secure.

Disclaimer: The above information is indicative in nature. For more details on the risk factor, terms and conditions, please refer to the Sales Brochure and Policy Wordings carefully before concluding a sale.

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