While choosing a term insurance plan, one of the important issues to be taken into consideration would be the claim settlement ratio of the insurance company. The term insurance policy is supposed to create financial security for your loved ones in case of your sudden death. Actually, this security would depend on the company’s ability to pay off claims. In that case, the ratio of claim settlement becomes an important factor in deciding on an insurer’s dependability.
In this article, we go into great detail about what precisely the claim settlement ratio is, why it is important, and name a few of the best term life insurance plans in India as per their performances relating to claim settlement. We will also go through how such statistics are tracked by regulatory bodies such as IRDAI with the intention of making sure transparency and consumer trust exist.
What is a Claim Settlement Ratio?
It is the ratio of claims settled by an insurance company concerning the total number received within a fiscal year. Assume that in this case, an insurance company receives 100 claims in one financial year and settles 98, his CSR would then be 98%.
Why is the Claim Settlement Ratio important?
You are buying from the insurance company a promise that, upon death, it will pay your policy sum to your beneficiaries. The highest claim settlement ratio in life insurance basically means more history on the part of the company concerning the keeping of this promise. A good CSR depicts more likelihood that claims would be settled with greater speed and efficiency by the insurance company, instilling confidence in the foresight of policyholders.
On the other hand, a low value of CSR will hint that the insurance company might just reject the claim or delay the entire settlement process. It is, therefore, of utmost priority to choose a term insurance scheme by firms that have been boasting a high claim settlement ratio for these years.
Brief Overview: IRDAI’s Role in Monitoring Claim Settlement Ratio
The IRDAI is the controlling body of all insurance companies in India. IRDAI releases an annual report every year which mentions all the key statistics of each insurer, and one among them is the claim settlement ratio. It proves to be a great helping hand for the policyholders to determine on which companies they can rely the most for their claim settlement.
The annual report of IRDAI gives a comprehensive view regarding the performance of each insurance company in regards to paying the claims. IRDA claim settlement ratio provides most credible and referred data while judging the performance of term insurance providers by experts as well as policy holders.
Key Factors That Affect Claim Settlement Ratios
Now, several factors account for the claim settlement ratio of an insurance company. These would also help the policyholder understand and make decisions based on that. For example, if an insurance company asks for complete disclosures at the time of application of the policy, it would ask for more disclosures. Hence, the CSR would automatically become high since fewer claims would have been rejected due to nondisclosure or misrepresentation.
Policy Tenure:
Sometimes, with greater tenure of policy, come greater rejections since the insured might have suppressed some critical information at the time of purchase of policy.
Size and Financial Health of the Company:
A large and financially healthy insurance company often offers a better claim settlement ratio. Such companies can handle many claims without facing financial strain.
Claims Handling Process:
Companies offering hassle-free, transparent, and fast claim settlement procedures will always report higher CSRs.
Top 10 Claim Settlement Ratios of Life Insurance Companies in India
Following is a list of the top 10 claim settlement ratios of life insurance companies on the basis of the latest report from IRDAI: Rank Insurance Company Claim Settlement Ratio (%)
- Max Life Insurance 99.34%
- HDFC Life Insurance 99.07%
- Tata AIA Life Insurance 99.06%
- ICICI Prudential Life 98.58%
- SBI Life Insurance 98.48%
- Bharti AXA Life 98.43%
- LIC of India 97.79%
- Aditya Birla Sun Life 98.04%
- Kotak Life Insurance 98.5%
- Bajaj Allianz Life 98.02%
These companies consistently report a high term insurance claim settlement ratio. This performance places them among the best in India’s insurance industry.
Individual Insurance Claim Settlement Ratio of LIC
LIC, or Life Insurance Corporation of India, is one of the oldest and most trusted insurance companies in India. With a claim settlement ratio of 97.79%, LIC is the first choice for many policyholders. Its vast network, reliability, and government support contribute to its popularity. While some private companies have slightly better ratios, LIC’s consistent performance and customer service make it one of the best term plans in India.
Things to Consider While Choosing the Best Term Plan in India
Claim Settlement Ratio: Always go for an insurance company having a high CSR. You should exercise caution when choosing a term plan. Its main purpose is to ensure your family receives necessary finances in your absence.
Premiums:
Premium is an overriding factor; however, the selection of any plan requires it to be within your budget. Consider a number of plans and their premiums in view of the resultant coverage provided.
Additional Riders:
Critical illness, accidental death benefit, waiver of premium, etc., are the other riders sold by the insurers. Riders add to the policy coverage in that they provide some complementary coverage to the policy.
Claim Settlement Process:
Needless to say, it’s best to choose an insurance company with a smooth and quick claim settlement process. Normally, companies with higher term insurance claims settlement ratios have a proper mechanism for handling claims.
Customer Service:
The efficiency of an insurance company in addressing customer queries and grievances is also an important consideration.
Best Term Life Insurance Plans in India
Top-rated term insurance schemes of India have mentions in terms of comprehensive coverage along with high CSR ratio. Some of the top contenders will be as under:
HDFC Life Click 2 Protect Plus:
Strong for flexibility in coverage, this plan offers an extremely good claim settlement ratio with a lot of options for the policyholder.
The Max Life Online Term Plan Plus:
The company has one of the best claim settlement ratios, making it a top choice for customer reliability and satisfaction.
ICICI Prudential iProtect Smart:
With competitive premium rates, the plan has achieved a strong CSR, gaining popularity among policyholders.
The Tata AIA Life Sampoorna Raksha:
It has a strong claim settlement ratio, making Tata AIA one of the best options for term life insurance in India.
SBI Life eShield:
This policy provides comprehensive protection and has a good CSR, backed by one of the country’s largest financial conglomerates.
Conclusion: Choose the Right Term Insurance Plan
Selecting term insurance is crucial, as it ensures that loved ones are taken care of if the policyholder dies. A high claim settlement ratio indicates a trustworthy insurer and should be a key consideration. Generally, the best claim settlement ratio reflects the insurer’s commitment to customer satisfaction and fulfilling policyholders’ expectations. You can find the best term plan in India by consulting the annual IRDAI report and other key factors.
That is what makes a difference during those times-assurance that your claim is just, reasonable, and will be honored. So, before you pick your term life insurance scheme, check the claim settlement ratio of the insurance provider. Essentially, this helps you understand how your family will be covered in the way you desire.