Health Insurance Claim Settlement Ratio – All You Need to Know
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Health Insurance claim settlement ratio- All you need to know

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Health insurance claim settlement ratio - All You Need to Know

Max Bupa

23 September 2020

What is a Health Insurance Claim Settlement Ratio?

 

Health insurance claim settlement ratio is the proportional difference between the insurance claims that are raised and those that are paid by the insurer within a defined time period. This is an important aspect to consider while buying health insurance plans to have claims settled efficiently and in a timely manner.

The health insurance claim settlement ratios of Insurance Regulatory and Development Authority of India registered insurance companies are calculated annually and published by the regulator.

 

How is Claims Settlement Ratio Calculated?

 

The formula to calculate the claim settlement ratio for health insurance is:

Claim Settlement Ratio = (Total Claims Paid / Total Claims Received)

For example, if an insurance company has a claims settlement ratio of 95%, this means that for every 100 claims that are made by a policyholder, 95 of those are paid and settled.

Claim settlement ratio in health insurance is not just an average of all the paid and settled claims in a year with respect to life insurance but any and all kinds of insurance that a insurer may offer.

 

Why is Health Insurance Claim Settlement Ratio Important?

 

Claim settlement ratio for health insurance is important in indicating the insurer’s ability to solve claims efficiently and reliably as well as their risk management skills. The higher the Claim Settlement Ratio for health insurance, the better it is for the insured customer. It further guarantees that the experience of filing the claim will be efficient, transparent and convenient. If there are any unforeseen circumstances by which one needs quick disbursement of funds, the same is assured.

 

Documents required for Claims Settlement -

 

There are a few documents that must be presented while applying for a claims settlement:

  1. 1. The health insurance policy document
  2. 2. NEFT mandate form attested by bank authorities along with a cancelled cheque of bank account passbook along with nominee's photo identity proof
  3. 3. Discharge or death summary attested by the hospital authorities of FIR & Post Mortem Report or viscera report (in case of death by accident)

 

Health Insurance Claim Settlement Process

 

There are five steps that must be followed in order to receive a cashless insurance claim:

 

  1. 1. Locate the hospital associated with your health insurance policy to receive treatment
  2. 2. Within 24 hours of emergency hospitalisation and 48 hours prior to planned hospitalisation, the insurance company should be informed.
  3. 3. Carry the required documents and your policy details to fill in the forms that need to be submitted for the same
  4. 4. Once the details are reviewed the claim will either be approved or rejected
  5. 5. If the claim is approved, the insurance company will bear the cost of the treatment, however, if it is rejected, the costs will be borne by the individual.

In some cases, insurers may have a dedicated resource to provide assistance while filing claims which proves to be helpful.

 

If your health insurance claim is rejected-

 

When one applies for a claim, but it is rejected, it is important to note that the rejection does not come without a valid reason. 

 

Here are a few reasons for claim settlement rejections:

 

  1. 1. If the details required for the claim are incorrect - one must double-check the information that has been filled in all the forms in order to avoid such errors. 
  2. 2. Misinformation - if the insurance company is not informed of all pre-existing health conditions while buying health insurance plans, they are likely to reject the claim. Be transparent with your insurer.
  3. 3. Inability to follow guidelines - Ensure that errors do not take place while filing a claim since every company has its own set of processes which help them function efficiently.

 

Conclusion:

While buying health insurance plans, claim settlement ratios are an important indicator however, they aren’t the only indicator to look out for while considering a policy. You must be proactive in reviewing all the information about the policy that you choose as well as their claim settlement process, so you understand what you’re opting for. From your end, make sure you are honest with the insurance company regarding your lifestyle and health condition so that no problems are faced in the future while filing a claim.

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