GuideUpdated Nov 2026 · 1 min read
Health Insurance Formula Sheet
The working sums behind health cover.
III does not publish a formula list for IC-27, so this is our own summary. Numbers are illustrative.
Core Formulas
Claim frequencyClaims / Lives covered
Average claim costTotal claims / Number of claims
Pure premiumFrequency x Average claim cost
Incurred claims ratioIncurred claims / Earned premium
Claim after co-paymentAdmissible amount x (1 - co-payment %)
| Measure | Formula |
|---|---|
| Claim frequency | Claims / Lives covered |
| Average claim cost | Total claims / Number of claims |
| Pure premium | Frequency x Average claim cost |
| Incurred claims ratio | Incurred claims / Earned premium |
| Claim after co-payment | Admissible amount x (1 - co-payment %) |
Worked Example
- 1
Portfolio
1,000 lives and 80 claims costing ₹40,00,000.
- 2
Frequency
80 / 1,000 = 8%.
- 3
Average cost
₹50,000.
- 4
Pure premium
0.08 x ₹50,000 = ₹4,000 per life.
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FAQs
What is the incurred claims ratio?expand_more
Incurred claims divided by earned premium.
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