Why Claim Settlement Ratio Of Your Insurer Is Important?

Claim settlement ratio is very important component to consider when you are selecting a particular insurer for your term policy. As we all know that Term plans are an important component of anybody’s financial plan as it acts as an insulation for the family against all financial risks that might arise  in case the main bread earner of the family dies or becomes incapable of earning any more.

Before even buying a term plan the person should make a proper calculation regarding:

a)Goals of the various family members who are dependent on the bread earner

b)Any financial liability that already exists.

Other than the above factor one should also take inflation rate into consideration because the value of the goal today would definitely rise at the point when the same has to be achieved and which is a quite common scenario in any economic condition.

Now let’s understand why the claim ratio of your insurer is very important from the perspective of which plans to select and which not to. With the coming of online term plans and website offering Compare Term Insurance Plans online people generally get over persuaded by the premium prices and miss an important component like Claim settlement ratio which is also an important parameter to judge. Say you planned well for your term plan and your insurer doesn’t settle your family’s claim then all your planning would go to waste.

Looking at the recent data published by IRDA on claim settlement ratios shows some astonishing data. You might notice that leaving LIC and most of the state run insurers have a very low claim settlement ratio.

 

Insurance Provider

Death claims received

Claim settlement ratio

Death Claims Paid

Claims Pending

LIC

7,55,901

98.33%

7,42,243

0.50%

Max Life

9,223

96.95%

8,804

0.10%

Birla Sunlife

8,436

88.45%

8,055

1.70%

Tata AIA Life

3,873

96.80%

3,659

1.00%

Star Union Daichi

1,266

80.73%

1,191

0.30%

ICICI Prulife

12,309

96.20%

11,546

0.80%

PNB MetLife

2,466

85.36%

2,290

1.50%

Bajaj Allianz

20,661

91.30%

18,978

3.00%

Kotak Mahindra Life

2,686

89.09%

2,437

3.20%

HDFC Std

12,189

95.02%

11,031

2.30%

SBI Life

14,876

93.39%

13,303

3.20%

Sahara Life

778

90.30%

700

3.60%

AegonReligare

460

95.31%

413

0.20%

Canara HSBC

576

92.99%

516

3.10%

Exide Life

3,432

89.36%

2,955

1.60%

Reliance Life

18,142

93.82%

15,211

5.80%

Future Generali

2,160

90.26%

1,808

1.80%

Aviva Life

1,690

81.97%

1,396

0.50%

Bharti AXA Life

1,112

80.02%

900

2.90%

IDBI Federal Life

1,017

84.79%

736

4.30%

India First Life

1,655

71.87%

1,195

5.00%

Shriram Life

1,960

60.24%

1,307

11.20%

DHFL Pramerica

953

83.64%

545

6.50%

Edelweiss Tokio

119

85.11%

68

5.00%

 

The policies which you might find very effective from the perspective of your needs and which are very cheaply priced might have the lowest claim settlement ratios. As this particular ratio defines the amount of claim your insurer would probably settle when a claim is raise and sometimes defies the objective why the policy is bought.

So whenever you plan your term insurance plan do considered claim settlement ratio as parameter to decide which policy to buy and which not to.

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