You want to take out health insurance that covers the entire family. Which company’s policy is best?
There are many insurance companies in the public and private sector and there are many health insurance plans for them in the market today. This is the question that repeats itself in everyone’s mind while joining, renewing or porting the policy. Claim settlement ratio is generally considered before taking an insurance policy. Also let’s look at the premium-claim ratio.
Claim settlement ratio is the percentage of total claims paid by the insurance company during a particular period. That is, suppose the claim settlement ratio of a company is 92 percent. This means that out of 100 claims filed, 92 were settled within the deadline.
According to IRDAI data for the period 2022-23, insurance companies settled 86 percent of claims till March 31. Eight percent refused. The remaining six per cent is pending till March 31. In 2022-23, the total amount of claims under general-health insurances was Rs 64,631 crore. The amount has increased by two percent compared to the previous year. Meanwhile, the health insurance segment saw a decline in the total amount spent on claims. It has come down to 89 percent in 2022-23 from 109 percent in 2021-22. The higher amount had to be spent during 2021-22 may be due to the covid pandemic.
Companies settled 2.36 crore health insurance claims during 2022-23. 70,930 crore has been spent for this purpose. That means an average of Rs 30,087 spent per claim. 75 per cent of claims are through TPA (Third Party Administrator) and 25 per cent through direct system of companies. 56% of the total claims were through cashless system. 42 percent through reimbursement. Figures show that two per cent claims are settled by incorporating these two mechanisms.
Let’s look at both the ratios explained above before buying or porting the policy. The total amount paid in the claim should not be higher or lower. If this amount is 110 percent, it can be understood that more amount is spent on claims than the premium collected. This may lead the company to financial crisis in future. Or there may be a significant increase in the premium amount in the future. A ratio between 80 percent and 100 percent can be seen as reasonable.
Below 60 percent indicates reluctance to settle claims and above 100 percent indicates profitability. If it is less than 60 percent, it can be seen as an indication that the company is running low on most of the claims received. Health insurance policies can be joined, renewed or ported to other companies by evaluating such possibilities.
