How we rated health insurance policies
Mint SecureNow Mediclaim Ratings 2017 looked at 60 health insurance plans from 23 non-life insurance and stand-alone health insurance companies. We rated about 60 products across 18 categories of individual and family floater segments. For both individual and floater policies, we have rated products across three sum-insured categories: Rs10 lakh, Rs20 lakh and Rs50 lakh. In the floater segment, for a family of three we assume the eldest member to be 30 years old, and a family of four to be headed by a 45 year old. In the individual segment we have four age categories: 30 years, 45 years, 60 years and 75 years. We have rated these products broadly on price, product features and claims experience.
This year, we have created a separate ratings scale for ‘senior citizens’ at 75 years.
In the non-senior citizen category—up to 60 years—premiums get a weightage of 35%. For senior citizens, premiums get a weightage of 30%. For 30 and 45 year olds, premiums are rated by looking at the averages of higher age bands to account for future inflation in premiums. So for a 30-year-old, we have averaged the premium at age 30, 45 and 60 years, and for 45 year olds we have averaged premiums at 45 and 60 years. For 60 and 70 years olds, we have rated exact premiums. Premiums are then put into four buckets. Policies in the top quartile (the cheapest ones) get the highest rating. Note that calculating the average is a back-end exercise and what you see in the tables is the actual premium for that age.
In terms of features, general category gets a total weightage of 45% and the senior citizen category gets a total weightage of 50%. Within this category, parameters have the same weightage for senior and non-senior citizen categories. But, some features that are not relevant for senior citizens are kept only in the non-senior citizen category and vice versa.
In features, sub-limits on room rent and waiting periods on pre-existing ailments have weightages of 15% each.
We have added two new features in both segments: OPD and wellness programmes, with weightage of 2.5% each. Policies that allow at least Rs10,000 under OPD benefits in the sum insured categories we have chosen at least once in a five-year block get full marks. Some insurers restrict the OPD benefits but this has not been captured by the ratings yet. As for wellness, the policy is given full marks if there is a monetary incentive or a sum insured bump-up to maintain a healthy lifestyle (Read more in the footnotes).
Features for Non-senior citizens
This category has two additional parameters of critical illness cover and restore benefit with a weightage of 2.5% each. So, if a plan offers in-built critical illness cover, it gets 2.5%, else a zero. Same goes for restore feature that reinstates the sum insured once the cover is exhausted. Other than this, the no-claim bonus is given a weightage of 5%. So, if the maximum bonus ends up doubling the sum insured, the policy gets full marks but if the maximum increase is only by 25%, it gets a zero. The duration within which the bump-up in sum insured happens is not factored in.
Features for senior citizens
We have retained three parameters for the senior citizens. These are: co-payment clause where the policyholder has to pay a percentage of the claim amount, disease-wise capping and waiting period on specified ailments. Each of these parameters has a weightage of 5%.
Insurer’s track record
Claims and complaints get a total weightage of 20% for both general and senior citizens. The percentage of claims settled is arrived at by dividing the number of claims settled by the total number of complaints on which a decision is taken. So, the numerator has claims settled whereas the denominator has the sum of claims settled, claims closed and claims rejected. Outstanding claims have not been factored in. A settlement ratio of at least 95% gets 15% and settlement ratio of less than 85% gets a zero. The second parameter in this category is to look at claim complaints and is measured as claims complaints per 10,000 claims. Claims complaint that’s less than 30 per 10,000 claims get full 5% whereas claims complaints that’s more than 60 gets zero. Policies are then rated for each of these parameters and a total score is calculated. You can see the detailed parameters and the score online at www.livemint.com/mintmediratings2017. Keep in mind that the decimal points have been rounded off, so you may see a slight discrepancy in the final score. Policies with most of the essential features that we have pointed out in the rating scale have been rated A and their score lies between 65% and 100%. Subsequently, policies shift to B with a score of 45% or more and the rest gets pushed to the C category.
We recommend you don’t stop at looking at the top rated products alone. We have displayed only ‘A’ rated products here and you can find the complete product ratings online www.livemint.com/mintmediratings2017. Online go to the granular ratings and look at the parameters and the score. Here you can see the average premium taken for ratings purpose, product features and claims experience of the insurance companies as well. Keep the ratings scale handy with you to compare. There could be features that you think may be less relevant to you and a low score there may not matter to you much. Affordability is definitely important, but look for plans that are less restrictive and are offered by insurers with a good track record. If you are not happy with your plan, the good news is that you can port your policy. (Read here to understand the process of porting your policy: bit.ly/2pYXRJF)