How We Evaluate and Recommend Health Insurance Plans

The Algates Insurance Framework: Introduction

Choosing health insurance is confusing. There are hundreds of plans, dozens of insurers, and everyone claims to be the “best.”

But here’s the problem: most recommendations you see online are either biased or based on incomplete information. Some lists prioritise insurers who pay higher commissions. Others focus only on premiums while ignoring what matters most; whether the insurer actually settles claims when you need them.

At Algates Insurance, we built a transparent framework to cut through this noise. This guide explains how we evaluate health insurance plans and insurers in India using IRDAI data, claim performance metrics, network hospital coverage, and long-term pricing behavior. Our framework helps families compare health insurance plans objectively and choose the right sum insured, insurer, and policy benefits.

Why We Built This Framework

The Indian health insurance market is overwhelming. Close to 30 insurers offer hundreds of policy variants. Each plan has different features, exclusions, sub-limits, and waiting periods.

Most families don’t have time to:

• Read 50-page policy documents
• Compare claim settlement data from IRDAI reports
• Understand which hospitals are actually in the network
• Figure out which insurer pays claims smoothly

Here, Algates Insurance takes over the data crunching so your decision comes down to 2–3 clearly ranked options, not 30 confusing brochures.

The Algates Insurance Framework helps you identify:

• How much health insurance coverage you actually need.
• Which insurers are reliable and trustworthy.
• Which plans offer the best value for your money.

Our framework has three pillars:

1. Right Cover (Coverage Fit Score): Calculate the right sum insured for your family
2. Right Insurer (Reliability Score):  Evaluate insurers on financial strength and claims track record
3. Right Plan (Plan Quality Score): Score individual plans based on insurer quality, features, and affordability

Let’s break down each pillar.

Pillar 1: Right Cover (Coverage Fit Score)

Before you compare plans, you need to know how much coverage you need.

Too little coverage, and a major illness could wipe out your savings. Too much, and you’re wasting money on premiums you don’t need.

We use four factors to calculate the right sum insured:

1.1 City of Residence

Healthcare costs vary dramatically across India. The same heart surgery that costs ₹8 Lakh in Mumbai might cost only ₹4 Lakh in Jaipur.

Metro cities like Delhi, Bangalore, and Chennai have much higher medical costs than tier-2 or tier-3 cities. Your city directly impacts how much health insurance you need.

1.2 Age Profile

Age is the biggest factor in healthcare costs. If you’re in your 20s or 30s, serious health issues are rare. But after 40, medical costs increase significantly.

Chronic conditions become more common, hospital visits increase, and treatment costs go up. A ₹10 Lakh policy might be enough for a 30-year-old, but completely inadequate for someone aged 55.

1.3 Family Size

Are you buying for yourself or covering your spouse and children? What about parents?

Family floater policies need higher sum insured because multiple members might need hospitalisation in the same year. A couple with two kids needs much more coverage than a single person.

1.4 Medical History

Do you have any existing health conditions? Does diabetes, heart disease, or cancer run in your family? Medical history isn’t just about current illnesses. It’s about understanding your future healthcare risks based on family patterns and lifestyle.

The 1-3X Annual Income Rule

Here’s our simple guideline: Your health insurance coverage should be 1-3X of your annual household income. This provides enough buffer to handle major medical emergencies without destroying your finances.

For example: If your family earns ₹10 Lakh per year, aim for minimum ₹10 Lakh in health coverage. Then adjust based on your city, age, family size, and health history.

Applied our 1-3X income rule to your profile? 

Most families need upward adjustments for metro costs or family floaters. Book a call and our advisor will calculate your Right Cover amount based on your city, age and family size.

30 minutes. Zero cost. Get your personalised sum insured and potential red flags identified.

Book A Free Call

Pillar 2: Right Insurer (Reliability Score)

Your health insurance policy is only as good as the insurer backing it. A cheap premium means nothing if the insurer rejects your claim or delays payment for months. That’s why we evaluate every insurer using six clear metrics.

2.1 Claim Settlement Ratio (CSR) – 20% Weight

Our Benchmark: Above 90%

CSR tells you what percentage of claims an insurer actually pays. If an insurer has a 95% CSR, they approve 95 out of every 100 claims.

We look at IRDAI data to see which insurers consistently pay claims. A high CSR means:

• The insurer doesn’t look for reasons to reject legitimate claims.
• The claims process is fair and transparent.
• They prioritise customers over profits.

This is the most important metric, which is why it carries a 20% weight in our scoring.

2.2 Claim Complaint Volume – 20% Weight

Our Benchmark: Less than 20 complaints per 10,000 claims

It’s not enough to settle claims. How the insurer treats you during the process matters too.

High complaint volumes mean:

• Delays in cashless approval
• Disputes over covered expenses
• Poor customer service
• Making you fight for every rupee

We track complaints per 10,000 claims from IRDAI mandated public disclosures data. This shows which insurers make claims easy and which ones create problems.

2.3 Incurred Claim Ratio (ICR) – 10% Weight

Our Benchmark: 60-80%

ICR shows what percentage of collected premiums are paid out as claims.

Too low (below 60%)? The insurer might be rejecting valid claims to protect profits.

Too high (above 80%)? The company might be facing financial stress.

The sweet spot is 60-80%. This means the insurer pays legitimate claims while staying financially stable for the long term.

2.4 Network Hospitals – 15% Weight

Our Benchmark: 10,000+ hospitals

Cashless treatment only works if your hospital is in the network. Otherwise, you pay upfront and wait for reimbursement, exactly when you can’t afford the stress.

We prefer insurers with large networks covering:

• Metro cities
• Tier-2 cities
• Smaller towns

Your coverage should work wherever you might need treatment.

2.5 Gross Written Premium (GWP) – 20% Weight

Our Benchmark: Strong market presence

GWP shows an insurer’s size and market presence. Larger insurers typically have:

• Better financial strength
• More negotiating power with hospitals
• Mature claims processes
• Proven ability to handle economic challenges

Size doesn’t guarantee quality, but it usually means stability. You want an insurer who’ll be around 20-30 years from now.

2.6 Years in Business – 15% Weight

Our Benchmark: 10+ years

Health insurance is a long-term commitment. We prefer insurers with at least 10 years of proven track record.

Established players have survived:

• Economic downturns
• Regulatory changes
• Major claim events
• Operational challenges

New insurers might offer attractive features, but track record matters when choosing who protects your family.

How We Score Insurers

Each insurer gets a score out of 5 based on these six weighted parameters. We only recommend insurers who score above our threshold on all metrics. This ensures every recommended insurer has passed our rigorous evaluation.

Pillar 3: Right Plan (Plan Quality Score)

Once you know your coverage needs and have identified reliable insurers, it’s time to pick the right plan.

We score every plan using four weighted factors:

3.1 Insurer’s Rating – 50% Weight 

This is the most important factor.

Even if a plan has amazing features, it only matters if the insurer actually honours them during claims. That’s why 50% of our plan score comes from the insurer’s rating in Pillar 2. This heavy weighting ensures you never choose plans from unreliable insurers, no matter how good the features look on paper.

Why this matters: When you’re hospitalised, you need quick cashless approval and fair claims. No amount of fancy features can make up for an insurer who fights you on every claim.

3.2 Plan Benefits and Features – 25% Weight

After insurer reliability, we look at the actual policy benefits:

Sum Insured Options
Can you choose coverage amounts that match your needs? Can you increase coverage later?

Sub-Limits
Are there caps on room rent, ICU charges, or specific treatments? Plans with fewer limits score higher.

Co-Payments
Do you have to pay a percentage of every claim? Lower or zero co-pay is better.

Restoration Benefits
If your sum insured runs out, does it restore for more claims in the same year? Full restoration is better than partial.

No-Claim Bonus
Does your coverage increase during claim-free years? Higher increases are better.

Waiting Periods
How long before pre-existing diseases, specific illnesses, or maternity are covered? Shorter waiting periods score higher.

Pre and Post Hospitalisation
How many days of outpatient expenses are covered before and after hospitalisation? 60 days is better than 30.

Day Care Procedures
Are modern treatments that don’t need overnight stays (dialysis, chemotherapy) covered?

Plans with better benefits, fewer restrictions, and shorter waiting periods score higher in this 25% allocation.

3.3 Riders and Add-Ons – 15% Weight

Additional coverage options that enhance your base policy:

Consumables Coverage
Covers items like syringes, gloves, bandages that are usually excluded. Can save ₹5,000-15,000 per hospitalisation.

OPD Benefits
Coverage for doctor visits, tests, and medicines outside hospitalisation.

Maternity Cover
Delivery expenses, prenatal and postnatal care, and newborn coverage.

Reduction in Waiting Periods
Reduces PED waiting period from 2 or 3 years to mere 30 days or so. Great for people with illness looking for immediate cover.

We look at:

• Which riders are available
• How much they cost
• What the coverage limits are
• Quality of each add-on

Plans with multiple quality riders at reasonable prices score higher.

3.4 Premiums and Affordability – 10% Weight

Price matters, but it’s our lowest weighted factor. Here’s why:

The cheapest plan that rejects your claim costs more than a slightly expensive plan that pays smoothly. We focus on value, not just low premiums.

We compare:

• Premiums across similar coverage from different insurers
• How premiums increase as you age
• Whether the price justifies the coverage and insurer quality

Only 10% weight ensures price doesn’t overshadow critical factors like insurer reliability. But affordability still matters because you need to maintain coverage long-term.

Real Example: How Plan Scoring Works

Let’s see a practical example:

Plan X from ABC Health Insurance

• Insurer Rating: 4.5/5
  • Plan starts with: 50% of 4.5 = 2.25 points
• Benefits & Features: Good coverage, minimal sub-limits, 60-day pre/post hospitalisation, full restoration, 2-year PED waiting
  • Rating: 4 out of 5
  • Score: 4 points X 25% = 1 point
• Riders: Consumables cover, reduction in waiting period, and maternity benefit available
  • Rating: 4.5 out of 5
  • Score: 4.5 points X 15% = 0.675 points
• Premium: 10% higher than market average
  • Rating: 4/5 points
  • Points: 10% of 4 = 0.4

Total Plan Score: 4.325/5

This scoring prevents you from chasing the cheapest premium or longest feature list while missing what actually matters.

See how your preferred plan stacks up using our proprietary scoring framework. It weighs insurer reliability, features, riders, and premiums to reveal what truly fits your family’s needs.  

Talk to an Algates advisor for your top 3 scored plans from our framework

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Why This Framework Works

The Algates Insurance Framework is built on one simple principle: transparency builds trust.

Here’s what makes it work:

Based on Real Data
We use publicly available IRDAI data, claim statistics, and regulatory reports. Not marketing claims or sales pitches.

Weighted by What Matters
Insurer reliability (50% in plan scoring) matters more than premium differences (10%). We weigh factors based on real-world impact.

Updated Every Year
Insurance changes constantly. We refresh our evaluations every year to reflect current data and performance.

Customised to You
The right plan for a 30-year-old in Mumbai is different from a 55-year-old in Pune. We apply this framework based on your specific situation.

No Hidden Conflicts
We may partner with some insurers (which we always disclose), but our framework applies equally to everyone. Poor performers don’t get special treatment.

Our Promise to You

At Algates Insurance, choosing health insurance should be a confident decision based on clear information, not confusing marketing or pushy sales.

That’s why we’re sharing our complete framework and methodology.

Because our success depends on one thing: Getting you the coverage you need, approved quickly and paid fairly, when you need it most.

Still confused about which health insurance plan is right for you?

At Algates Insurance, we analyse years of IRDAI data and match you with plans that are genuinely suited to your health profile, family size, and city.

Our framework works because it’s built on IRDAI data, not sales pitches. Turn it into your personalised plan shortlist with an Algates Insurance advisor; zero cost, zero obligation.

Book your free 30-minute consultation

Disclaimer: This information is for educational purposes only and doesn’t constitute financial or insurance advice. Insurance products and insurer performance change over time. Always read policy documents carefully and verify current information before buying. Consult a certified insurance advisor for personalised guidance.