Two Numbers To Look At Before Buying Health Insurance, According To Experts
The claim to settlement ratio is too broad, there are a few other metrics that can be reviewed before buying insurance.
After finding the right product, one tends to scroll to the reviews section. Be it the phone you are eyeing, the new restaurant on the street or even furniture.
Reviews help get expectations in place before committing to buy it and this is not limited to online shopping or cafes.
When it comes to products like health insurance, there are a few ratios that can help understand the efficiency of the system.
Claim To Settlement Ratio
One of the most common ratings that customers tend to look at is claim to settlement ratio. Essentially, this is the number of claims that were intimated to the company and how many of these were settled. But this number may be a bit too broad, according to experts.
"There is a ratio that is filed but these are the overall numbers," said Amit Chhabra, chief business officer, general insurance at Policybazaar.com.
The second issue here is regarding settlement. This arises when the policy condition may not match with the coverage, he said.
These numbers may not be reflective of reality as there may be claims that are rejected based on genuine reasons. Cases like fraud or fake claims that are meant to be rejected also get reflected in the numbers as well.
"Its not a great metric to measure the company. Its too broad a number," said Mahavir Chopra, founder of Beshak.org.
The ratio is also not mentioned directly but needs to be calculated. For those still wanting to take a look, there are websites that compile this data from various websites.
"Claim settlement ratios are available on company websites. There is also a public disclosure document. But this might be a tedious process," he said.
Better Options
Since the claim to settlement ratio is too broad, there are a few other metrics that can be reviewed before buying insurance.
There are two better alternatives for the claim to settlement ratios that are recommended by Chopra.
"A better ratio to look at the number of claims settled in the last 30 days," he said. This helps to get a glimpse of the efficiency of the system.
One can also look at the complains ratio, he added. This is the number of complaints will help understand how many people are aggrieved.
These two numbers might help in better evaluation of the company before buying the policy.
