A life insurance policy is a shield to cover risks and pay an appropriate amount for the risk covered so that financial obligations are met despite the event. Just buying an insurance plan from different health insurance companies is not enough if you are not looking at different considerations before investing.
It would help if you considered different factors while investing in medical insurance, including no claim bonus, waiting period, a network of hospitals and much more. However, the most crucial factor to check is the claim settlement ratio.
The Insurance Regulatory and Development Authority of India (IRDAI) keeps publishing relevant information about the incurred claim ratio of all insurance companies every year. In this post, let’s discuss the ratio of claims settled by the insurance company in India.
What Is Incurred Claim Ratio?
The Incurred Claim Ratio (ICR) is the ability of a company to make a payment towards the claim. It is the total value of every claim a company has paid against the total premium collected during the same period. The incurred claim ratio or calculated annually.
In simpler terms, Incurred Claim Ratio = Net Claims Incurred / Net Earned Premium.
The purpose of ICR is to indicate the health of the insurance company by which you can assess whether the company is in an excellent position to settle your claims. Therefore, you can choose the appropriate plan without worrying about the fear of rejection.
How To Choose The Appropriate Plan?
If a corporation cannot offer you coverage, it may reject some claims that are on the edge of being valid, increase the cost to better handle claims, or modify the product entirely.
Therefore, picking the right plan is essential. To help you, IRDAI publishes the incurred claim ratio of different insurance companies once a year. The following is some insider advice on incurred claim ratio (ICR):
ICR More Than 100%
An ICR greater than 100% implies that the insurer is paying more than the revenue received through premiums. As a result, such companies face losses and might reject the claims sooner or later.
ICR Between 50% and 100%
ICRs between 50% and 100% indicate the insurer is financially stable and suggest that claim settlements are being honoured. Therefore, the likelihood of your claims being paid for is high if you purchase a health policy from such an insurer. This range is the healthiest when it comes to buying insurance.
ICR Below 50%
This is quite concerning if the ICR is below 50% since it indicates that the insurer has a good surplus but does not resolve most claims in the insured’s favour. Therefore, it is not recommended to purchase insurance from such an insurer.
Incurred Claim Ratio And Claim Settlement Ratio: Difference
Health Claim Settlement Ratio and Incurred Claim Ratios (ICR) are frequently misinterpreted. A claim settlement ratio is the proportion of settled claims to all claims submitted during a specific accounting period. Therefore, if a company’s claim settlement ratio is 90%, 90 of the 100 claims that were filed have been resolved. The insurance provider has either refused or is still processing the remaining 10%.
The Bottom Line
Buying insurance from the best health insurance company in India is essential these days due to rising medical costs and to protect yourself and your family from uncertain events. It is also essential to buy insurance from the best health insurance company in India like Niva Bupa, since it aims to resolve the majority of insured’s claims with no hassle.
It offers various benefits like cashless hospitalisation, no claim bonus, high claim settlement ratio, high incurred claim ratio and a lot more. To know more, get in touch with Niva Bupa today!
