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The Claim Settlement Ratio is a percentage that represents the ratio of claims paid to customers by an insurance company to the total claims received by that company. Every year, the Insurance Regulatory and Development Authority of India (IRDAI) releases the Claim Settlement Ratio for life insurance companies.
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So, if you want to buy a life insurance plan or renew your existing one, you should always check the CSR of the life insurance company and buy a plan from an insurer with the highest claim settlement ratio. Let us take a look at what the IRDA claim settlement ratio is and what are the different claim settlement ratios of life insurance companies in India.
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Claim Settlement Ratio (CSR) is the percentage of claims an insurer settles in a year out of the total claims. It indicates the credibility of an insurance company, and therefore, the insurer with the highest CSR in life insurance is sought as the most trustworthy insurer to buy a term plan from. As a simple rule, the higher the CSR, the more reliable the insurance company is.
The IRDA Claim Settlement Ratio of life insurance companies is a reliable metric to determine if a certain insurer is the right option for you or not. You can easily find the different claim settlement ratios of life insurance companies on the official website of IRDAI (Insurance Regulatory and Development Authority of India). It is suggested that a customer must always buy a term plan or life insurance plan from an insurer with over 95% CSR for at least 5 consecutive years.
As discussed, IRDAI publishes the details of the IRDA claim settlement ratio of life insurance companies in India yearly. This report involves the correct figures and percentages of the number of claims made by the life assured, the number of claims rejected, and the number of claims settled.
Let’s take a look at the CSR of different types of life insurance companies as per IRDAI Annual Report. The table below illustrates the life insurance claim settlement ratio for the financial year 2023-24:
| Name of the Life Insurance Company | Claim Settled Amount(in cr) | CSR(in %) | |
| Aditya Birla Sun Life Insurance Company Limited | 458 | 98.65 | |
| Aviva Life Insurance Company India Limited | 97.60493 | 98.75 | |
| Bajaj Allianz Life Insurance Company Limited | 603 | 99.23 | |
| Bandhan Life Insurance Limited | 86 | 99.7 | |
| Bharti Axa Life Insurance Company Limited | 147.8473 | 99.01 | |
| Canara HSBC Life Insurance Company Limited | 186 | 99.23 | |
| Edelweiss Life Insurance Company Limited | 59.01555 | 99.23 | |
| Future Generali India Life Insurance Company Limited | 32.81137 | 96.08 | |
| HDFC Life Insurance Company Limited | 1389 | 99.5 | |
| ICICI Prudential Life Insurance Company Limited | 1950 | 99.17 | |
| IndiaFirst Life Insurance Company Limited | 159.8145 | 98.04 | |
| Kotak Mahindra Life Insurance Company Limited | 320.9181 | 98.74 | |
| Life Insurance Corporation of India | 18397.77 | 98.5 | |
| Axis Max Life Insurance Company Limited | 1242 | 99.7 | |
| PNB MetLife India Insurance Company Limited | 407 | 99.2 | |
| Pramerica Life Insurance Company Limited | 29.8 | 99.06 | |
| SBI Life Insurance Company Limited | 1676 | 98.3 | |
| Shriram Life Insurance Company Limited | 109.4 | 98.09 | |
| Star Union DAI-ICHI Life Insurance Company Limited | 113.4 | 96.27 | |
| Tata AIA Life Insurance Company Limited | 776 | 99.13 |
*Disclaimer: The list of insurers mentioned are arranged according to the alphabetical order of the name of insurance company respectively. Policybazaar does not endorse, rate or recommend any particular insurer or insurance product offered by any insurer. The list of plans listed here comprise of insurance products offered by all the insurance partners of Policybazaar. For complete list of insurers in India refer to the Insurance Regulatory and Development Authority of India website www.irdai.gov.in
The highest claim settlement ratio in life insurance indicates the insurer's reliability, and that the company can be trusted for availing the life or term insurance plans. On the other hand, companies with low life insurance claim settlement ratios signify low insurer credibility; therefore, not many customers will buy plans from them because of their inability to settle claims.
After looking at the table, the highest claim settlement ratio in life insurance is for Max Life insurance i.e., 99.5%. The max life IRDA claim settlement ratio indicates the fast settlement of claims.
Overall, the above table listing the life insurance claim settlement ratio of life insurers is good enough to select the term plan.
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It is important to note that the Claim Settlement Ratio is calculated for all the insurance products collectively offered by the insurance company, not for individual products.
To illustrate how this ratio is computed, let's take an example to understand the calculation of the CSR:
Imagine a life insurance company receives 1,000 claims within a year. Out of these, they approve and pay the term insurance benefits (or sum assured) for 996 claims, while rejecting the remaining 4 claims.
The claim settlement ratio for the insurer would be (996/1000)% or 99.6%.
The CSR is calculated using the following formula:
CSR = (Total claims settled in 1 year/Total claims in a year) X 100
For instance, if company X has settled 9600 out of 10,000 claims for 2022-23. The CSR will be 96%.
The higher the % of claims settled, the better the chances that your life insurance claim will be approved and then settled by the insurer. Another important aspect of a high CSR is the finances of an insurer. With a percentage of settlement above 95%, a prospective insurance buyer can be very sure that the company is financially secure. Also, they can pay most of their clients the life insurance claim amount.
You should also consider various factors like the insurer’s online review, the experience of your family and friends, and the benefits of the life insurance policy before making an informed choice.
The claim settlement ratio of life insurance companies
Life insurance is meant to help your loved ones financially if something unfortunate happens to you. But remember to always choose a life insurance company that has high CSR, preferably above 95%. That way, your family won't have trouble receiving the claim amount in the future.
The IRDA Claim Settlement Ratio of life insurance companies indicates the ability of a company to pay the sum assured to you or your beneficiary/nominee. If the insurance company has been maintaining high CSR over a substantial time, then they can settle claims quickly.
The duration in which your beneficiaries get the claim payout depends on how quickly they submit a claim and complete the necessary paperwork. If the information is accurate, an insurance company can process and pay the claim within as short a period as one to two weeks.
Some of the ideal situations are:
The life insurance plan is active for 3 years or more
All premiums paid for the insurance plan
The death's circumstances do not raise suspicion.
The claim process follows the death of the policyholder, upon which the nominee/claimant can go ahead and claim the death benefit. Below mentioned are the steps that determine the processing of the claim:
After the life assured's death, the nominee can initiate the claim process by filling out the Death Claim Form. They can submit it along with ID proof and address proof to the head office, bank branches, nearest offices, or by email. The form is available online on the company's website or offline at branch offices.
The nominee/claimant must also provide necessary documents with the form to confirm the information given to the insurance company about the policyholder's death. The following documents should be submitted within the given timeframe:
| Death Types | Documents Required |
| Mandatory Documents |
|
| Additional Documents Required: | |
| In case of Medical//Natural deaths |
|
| In case of accidental/unnatural deaths |
|
When the insurance company receives all the required documents and forms, the claim starts getting processed. The company will further check and verify the documents in accordance with the requirements, make a decision (subject to T&C), and finally, communicate the same to the nominee/claimant.
Below mentioned are the types of claims that can be availed upon buying a life insurance policy:
The Death Benefit is the primary type of claim in life or term insurance, offering financial assistance to the policyholder's family upon their untimely demise. It ensures that the surviving family members or nominees of the policyholder can maintain their lifestyles. To receive the assured sum, nominees must make a claim for the death benefits following the policyholder's demise.
Survival benefits (or maturity benefits) are received by the policyholder if he/she outlives the life or term insurance policy period. That is, if the policyholder pays all the premiums on time and completes the policy without any lapse, he/she is eligible for survival/maturity benefits.
If policyholders buy term plan or life insurance plan, and add riders to it, like Accidental Death Rider, Terminal Illness Rider, Waiver of Premium Rider, Critical Illness Rider etc., he/she can claim the rider benefits whenever the situation arises.
Here are some of the most common reasons for the rejection of life insurance claims in India:
Mentioning false information or inaccurate information in the application form of a life insurance policy
Not paying premium amounts on the due date or during the grace time
Causes of Death that are not covered by the insurance plan like suicide before completing 1st policy tenure, and accidental death caused by overconsumption of drugs/alcohol.
A falsified claim made by the policy’s beneficiary
Here are some points to consider while checking Life Insurance claim settlement ratio (CSR):
Always opt for a life insurance claim settlement ratio (CSR) of more than 95% for 5 consecutive years.
Check the claim settlement process and the time taken by the company to settle claims.
The higher the life insurance sales, the higher will be the average claim paid value.
One should always be aware of the highest claim settlement ratio in life insurance while purchasing a term plan. Using an online facility, you can easily avail of a term plan hassle-free. By disclosing details about your medical conditions, earnings, and other information, you will receive a high SA and it becomes easy to process the claims. The rejection of a life insurance plan based on the non-disclosure facts or misrepresentation and fraud has a negative effect on the CSR of an insurance company. In addition, you should consider other important features also in choosing the term, and plan as per your life goals along with the IRDA claim settlement ratio of life insurance companies 2024.
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Policybazaar does not endorse, rate or recommend any particular insurer or insurance product offered by any insurer. This list of plans listed here comprise of insurance products offered by all the insurance partners of Policybazaar. For a complete list of insurers in India refer to the Insurance Regulatory and Development Authority of India website, www.irdai.gov.in
+Rs. 487/month (Rs.16/day) is starting price for a 1 crore term life insurance for an 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 38 years of age.
Prices offered by the insurer are as per the approved insurance plans | #All savings and online discounts are provided by insurers as per IRDAI approved insurance plans | Standard Terms and Conditions Apply | **Tax Benefits are subject to changes in tax laws.| Policybazaar Insurance Brokers Private Limited
We will respond in the first instance within 30 minutes of the customers contacting us. 30-minute claim support service is for the purpose of giving reasonable assistance to the policyholder in pursuance of the claim. Settlement of claim (including cashless claim) is the responsibility of the insurer as per policy terms and conditions. The 30-minute claim support is subject to our operations not being impacted by a system failure or force majeure event or for reasons beyond our control. For further details, 24x7 Claims Support Helpline can be reached out at 1800-258-5881
For more details on risk factors, terms and conditions, please read the sales brochure carefully before concluding a sale
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+Rs. 820/month is starting price for a 2 crore term life insurance for an (NRI) 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 38 years of age.
+Rs. 1,443/month is starting price for a 5 crore term life insurance for an (NRI) 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 38 years of age.
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