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Know The Difference Between Incurred And Incurred Claim Ratios.

Updated On May 10, 2022

Health policy plans come with numerous features. And it is expected of the insurance holders to understand all such features so that they can benefit maximum from the insurance plans. Some of the important features of a health insurance policy include, hospitalization costs in case of both pre and post-hospitalization, inpatient expenses, rent of private or shared hospital rooms, domiciliary costs, and cost of using an ambulance. Further, there are other features like co-payments, deductibles, no claim bonuses, as well as medication charges, complementary healthcare checkups and more.

With so many interesting and multifaceted features, it becomes necessary for the policy holder to analyze and know all about them before buying a policy so that it can meet their health insurance needs.

Along with the above features, it is also important to check the legitimacy of the insurance company that you are willing to buy the policy from. With the right insurance provider, you can avail maximum benefits and easy settlements. Thus, when searching for an appropriate policy provider, you must evaluate factors like hospitals enlisted in the network of the insurance provider, products available, ratio of claim settlement, ratio of claims incurred, and also the customer service facility offered by the insurance company etc. Once you compare all such factors, you can shortlist your options as per your requirement and buy the best health policy that suits you.

Know The Difference Between Incurred And Incurred Claim Ratios.

What Is The Incurred Claim Ratio?

The percentage of total claims settled by an insurance company to the total number of premium value that the insured person pays to the policy provider is known as the incurred claim ratio. Thus, it is the value of the total number of claims settled by the insurance company divided by the total amount of premium that the company receives from the policy owner.

The calculation of the incurred claim ratio is done on a yearly basis and thus aids the policy owner to verify the total claims accepted by the insurance provider in a year. The incurred claim ratio is regarded as one of the key factors that needs to be considered while choosing a health insurance company.

What Is The Claim Settlement Ratio?

Unlike the Incurred Claim Ratio, the Claim Settlement Ratio (CSR) decides if the insurance provider you are buying the insurance from is credible enough to settle your claims immediately at the time of any health emergency or not. Here, you must consider the medical insurance companies offering claim settlement ratios of 80% and above. Also, you must compare the last 5 years’ claim settlement ratio of your insurance provider to see the consistent record of immediate settlement of claims by the provider.

Difference between Incurred Claim Ratio and Claim Settlement Ratio in medical insurance policy

Here are the basic differences between incurred claim ratio VS claim settlement ratio:

  • For selecting your insurance policy provider, the incurred claim ratio is regarded as a more accurate feature as it explains the ease with which you can claim your plans. On the other hand, claim settlement ratio is not regarded as an accurate pointer while considering the health insurance plans.
  • Most insurance companies take into consideration the time required to settle claims for deciding the incurred claim ratio, while claim settlement ratio is not taken into account for this calculation.
  • However, to calculate incurred claim ratio both the factors – total claims settled and total premium value – have to be of the same tenure. Conversely, it can be within six months to one year in case of claim settlement ratio.


The importance of health insurance cannot be denied and having health insurance is a must for everyone. However, you also know that waiting periods are a compulsory feature of all health insurance plans. And policy owners cannot claim any facility of the policy within this waiting period. Thus, it is important to buy insurance keeping in mind the fact that you will be able to use the policy to claim a settlement request after completing the waiting period.

Also read- Which Is Better For Me: Short-Term Or Long-Term Health Insurance

What Is Health Insurance And How Does It Work? A Comprehensive Guide


This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.

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