When it comes to purchasing health insurance either for you or to family, then you will come across many more doubts, like how much insurance is suffice for you, whether you can afford it or not, which one to buy and much more. The answer to this is a simple tool developed by POLICYADVISOR. Let us look how it works and help you.
Before proceeding further, let us look at recent annual report of IRDA Annual Report 2013-14. This will also give you some inputs about whom to believe and how they are doing business.
What is the Incurred Claims Ratio?
It is the ratio of claim incurred by the insurance company to actual premium collected for that period. You may also say it as a net claim settlement cost incurred to the net premium collected for a given accounting period. Formula for calculating is as below.
Incurred Claim Ratio=Net claims incurred/Net earned premium.
For example, let us say an insurance company’s incurred claim ratio is 90%. Then what it indicates is, for every Rs.100 earned as premium, Rs.90 spent on the claims settled by the insurer. Therefore, Rs.10 is the profit to the company. If this incurred claim ratio is over and above 100%, then it indicates that they suffered a loss in their business.
What this ratio indicates?
This indicates how much you can believe in insurance companies, when it comes to claim. Usually higher the incurred claim ratio then it is good for you. This is how the health insurance company’s performance is gauged. However, when it comes to insurance company point of view, then if higher the incurred claim ratio means the company is in loss. That is the reason usually insurance companies load your premium when they incur a higher loss in particular age group segment (even though you do not have any claims in previous years).
What this ratio doesn’t indicate?
When company A and company B have a same incurred claim ratio then it is hard for you to judge who settled claims quickly. So even though it may give a clear picture about an insurance company, but still hard to find who is efficient in claim settlement.
What is the difference between incurred claim ratios to claim settlement ratio?
You can confuse yourself between incurred claim ratios to claim settlement ratio. The claim settlement ratio is the ratio of settled claims to the total claims filed in a given accounting period. Therefore, if claim settlement ratio indicates 90%, then it means that out of 100 claims filed 90 claims are settled. Remaining 10% claims are either rejected or pending with the insurance company.
Below is the latest IRDA Annual Report for 2013-14 for individual Health Insurance Companies Incurred Claim Ratio for 2013-14.
As I said above, this CIR will give you an indication of believing on these insurance companies. You may notice that none of the private health insurance companies (including standalone health insurance companies) has CIR of more than their collected premium.
Now let us move to the next step of selecting the health insurance product by using the tool of POLICYADVISOR. Here in the first place you need to enter your date of birth and city you currently live. The name of the city is important to identify the cost of health in these cities. They did some research on this to arrive at the final figures on this.
Next, you need to enter your marital status, your monthly income, whether you want to add family members or not. If yes, then add the number of members you want to cover in this policy.
Last step is to specify whether you have any existing health insurance or not. This is required to arrive at the required Sum Insurance. Along with that, you need to enter information about any health issues. Finally share the information, whether you have any major hospital expenses in last 1 year or so.
That is all what you need to do. The result will show you whether you require any health insurance or not (based on your current health insurance), ideal cover required for you (based on current requirement, the city you stay, family members you want to cover and your health status.) and the required cover which excludes the existing insurance coverage.
If you need quotes for this insurance, then you can fill up your personal data like name, email id and mobile number. This will give you the list of products.
Few assumptions that were made to arrive at required quote are as below.
I know that buying health insurance involves too many data like apart from said information you may require information like co-payment clause, pre-existing diseases or many more. But by going through IRDA ICR and using the POLICYADVISOR tool at least you may come to nearer of your selection.
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View Comments
I need your suggestion for MEDICAL AGENT sir.
GM Basu sir,
I have passed IRDA exam to be an agent for Life Insurance and can also be a medical insurance agent. So need your suggestion before opting for a particular Company.
Dear Jyoti,
You can go with LIC and in case of general insurance go for Public Sector Companies.
hello sir
i have been denied insurance policy recently by a big vendor as i mentioned of ocd and 3 months medication to doctor i had around 15 years back.
Now can i apply to other insurance and is the data of rejections shared across and if i don't mention still will i be rejected again with new one?
Please advice. I am really worried as this ocd no more exists for me and wonder how can this be taken as a reason to reject. Also, these days everybody talks so casually about ocd.. but still its a taboo and can be a reason..
thank you very much..
Amit-You can apply with new insurers. But NONE can guarantee you that whether they accept or not.
thanks.. does this affect term insurance too, because I already have one and there I was not asked such thing so didn't provide any information on this as I was not aware that this matters. Should I do anything related to that now...
Also, is the rejection data all pooled into one at IRDA?
Thanks again..
Amit-If such diseases cause in death, then it really affects. Hence, you have to disclose (if the disease was there during policy issuing time). Otherwise you can ignore it. There is no such system to pool data from IRDA.
Thanks Sir
hello sir
i have question in my mind
you have a mediclaim if yes so which company ???
please give answer
Thank you sir
Pradeep-If I disclose MINE, then will that be your's also? See, I am not saying the product I bought must also be purchased by all blog readers. Each individuals requirement differs. Hence, I don't think it is necessary for me to disclose. Thanks for your interest in me :)
hello Basavaraj sir
i respect your opinion
Thank you
hello Sir,
I have decided to take a health insurance upto Sa of 5 Lakhs. Thinking of Religare. But uinversal sopmo offers almost same benefits with 3 thousand lesser premium.
1. Is religare worth paying 3 K more.
2. Which one you would recommend as an individual.
hello sir Basavaraj
iam totall aggree with ASHISH SINGH iam also buy uinversal sopmo mediclaim its nice no room rent capping and cliam settelment ratio also good enven nice network hospital
main thing is comapre to other than mediclaim is cheap price (iam port bajaj to uinversal sopmo )
Thank you
Pradeep-I am not at all against any particular company nor I have any personal interest to the particular company. I respect your decision.
hello sir
i know but i reach that point because of you & your research
Thank you
Pradeep-Great to know that.
Ashish-In that case you can go ahead with Universal.
Hi Basu ,
Thank you for the prompt replies.
What is your opinion about Canara Bank ( in tie up withUnited India) Mediclaim ?
I couldn't find the figures for that in your website.
I read an article insurances through banks cannot be trusted as their agreements might break down in the future. Is this true ?
Thanks,
Raj
Raj-Refer my latest post "IRDA Incurred Claim Ratio 2015-16 | Best Health Insurance Company in 2017".
Hi Basu,
I would like you to answer another question if possible.
I went through some plans and saw that most private plans provide health insurance only for upto 5 and 10 lakhs.
Am interested in getting an insurance fro worst case scenarios like cancer etc and these plans seem to grossly inadequate.
From your comments to other answers , I know you don't specifically suggest any policies , but could you make an exception please and give some direction.
I saw that new india assurance provides 20 lakh and 30 lakh plans. Are their plans good, and do they settle plans quickly? Am afraid they will be slow and inefficient since they are a government company.
Many Thanks ,
Raj
Raj-I don't think there is a cap in sum insured with private players. However, you can rely in public sector companies also. If you feel the cover not enough, then you can opt for super top up plans than buying higher base plan.
Hi Basu,
Thank you for your informed posts. Could you please make it more clear about what constitutes a pre-existing condition claim? Suppose I have a disease I am not aware of, and it is diagnosed after I take a policy, will it be considered preexisting ?
Thank you,
Raj
Raj-YES.
Hello Sir,
I want to purchase a individual health insurance. My basic criteria is
1. No Room rent Cap
2. No Sub Limit & Co-Pay
3. Least permanent exclusion and maximum disease type coverage.
4. Lowest waiting period
5. Good and reliable and hassle free claim settlement service
6. No or lower loading and hassle free renewal.
Can you please suggest or name 3 insurer according to your preference which fulfills these criteria?
Thanks.
Riya-Hard to fulfill all your wishes.
Sir,
Still, which plan will be the nearest option?
Riya-I can't point any SINGLE.
Hi Basu,
Is claim settlement ratio the only measure available to consumers to help them make a decision ? I feel more data is required by customers. Especially what percentage of “number of claims” received by the company has been settled ? Example: Company A got 10 customers who pay a premium of 10,000 INR each and this policy lets say allows them to claim upto 5 lakh INR each per year. Lets assume that 5 of these customers made claim worth 1 lakh each during the year. Lets also assume that company A approved only 1 claim and denied 4 claims for flimsy reasons.
Now here is the math: In this example, company A earned total premium of 1 lakh INR for the year (10,000 * 10 customers) and paid out 1 lakh to customers. So Incurred Claim Ratio = 100 percent BUT actual claims settled = only 1 out of 5 = 20 percent . If customer looks at Incurred ratio it looks great …wow 100 percent..BUT the real deal is how much number of claims they settled..ie only 20 percent (1 of 5 claims) in this example. The measure “incurred claim ratio” we are discussing in your article suits the company not the individual. Your opinion please ?
Mathew-I understood your views. That is the reason, initially I pointed what IRDA publishes is just raw data. We can't rely on this sole data while selecting a product.