Finding the best term insurance plan is an impertinent necessity for an individual who has dependents or a family. It is a proven fact that a term plan offers the most ‘value for money’ proposition. It is the basic form of life insurance where a fixed sum assured is paid on the death of the policyholder. In case of survival of policy term, the insured gets nothing in return. The premium on even the best term plans depends on three basic factors: age, term of the policy and the sum assured you choose

Now as you know what term insurance means. Let us look at the claim settlement ratio of term insurance providers according to IRDA in the year 2015-2016. We will update the table according to the latest data available.  

Best Term Insurance Plans in India 2019 

Term Plan	Entry Age (Min-Max)	Policy Term (Min-Max)	Accidental Death Benefits	Critical Illness Benefit	Waiver of Premium	Terminal Illness
LIC E-term Plan	18 - 60 years	10 - 35 years	N/A	N/A	N/A	N/A
ICICI Prudential iProtect Smart	18 - 60 Years	5 - 40 years	Paid	N/A	Free	Free
SBI Life eShield Plan	18 - 65 years	5 - 30 years	Paid	N/A	N/A	N/A
HDFC Life Click 2 Protect 3D Plus	18-65 years	10 - 40 years(or upto 50 Years)	Paid	Paid	N/A	N/A
Max Life Online term Plan Plus	18-60 years	10 - 40 years	Paid	N/A	Included	N/A
SBI Smart Shield	18 - 60 Years	5 - 40 years	Paid	N/A	Free	Free
Aegon Life iterm Plan	18-65 years	5 - 40 years (or upto 80 Years)	Paid	N/A	Paid	Free
Aviva iLife Plan	18- 55 years	10 - 35 years	N/A	N/A	N/A	N/A
Bajaj Allianz eTouch Lumpsum	18 - 65 years	10 - 40 years	Paid	Paid	Free	N/A
PNB MetLife Mera Term plan	18-65 years	5 - 40 years	Paid	Paid	N/A	N/A

**Note: The above plans require mandatory medical proofs. 

LIC e-Term Insurance Plan

As one of the best term insurance plans, LIC e-term plan is an online term insurance plan which provides financial security to the family of the insured at a very affordable premium rate.  As it is an online term plan, the process of purchase of LIC e-term plan is very simple and hassle-free. The policy provides a death benefit to the beneficiary of the policy in the event of the uncertain demise of the insured during the tenure of the policy. 

ICICI Pru iProtect Smart

As one of the best term insurance plans in India, ICICI Pru iProtect Smart Plan comes with different options of life cover to choose from. As a comprehensive term insurance plan ICICI Pru iProtect Smart provides financial protection to the family of the insured at a very affordable premium rate. The plan also provides additional rider benefit as accidental death rider benefit and critical illness benefit in order to enhance the coverage of the policy.

SBI eSheild

As one of the best term insurance plans in India, SBI eShield is an online term insurance plan which provides life coverage to the family of insured at a very affordable premium rate. The plan comes with 4 different options of life cover.  Apart from death benefit the plan also provides tax benefit under section 80C and 10(10D) of Income Tax Act 1961.   

HDFC Life Click 2 Protect 3D Plus

HDFC Life Click 2 Protect 3D Plus is an online term insurance plan which provides comprehensive insurance coverage to the family of the policyholder at an affordable premium rate. The 3D in the HDFC Life Click 2 Protect 3D Plus refers to the uncertainties of life i.e. death, disease, and disability. The plan safeguards the family of the insured financially in case of a covered eventuality. HDFC Life Click 2 Protect 3D plus offers the option of 9 plans to choose from.

Max Online Term Plan Plus

Max Online Term Plan Plus is known as one of the best term insurance plan, which provides life protection to the family of the policyholder at a low premium rate. As a non- participating pure term insurance policy, Max Online Term Plan Plus offers the 3 different life cover options to choose from. The plan also provides additional rider benefit as accidental death rider benefit and waiver of premium rider benefit in order to enhance the coverage of the policy. 

SBI Smart Shield

SBI Smart Shield is known as one of the best term insurance plan, which provides life protection to the family of the policyholder at a low premium rate. As a non- participating pure term insurance policy, SBI Smart Shield offers the 4 different life cover options to choose from. The plan also provides additional rider benefit as accidental death rider benefit and critical illness benefit in order to enhance the coverage of the policy. 

Aegon Religare iTerm Plan

As one of the best term insurance plans, Aegon Religare iTerm Plan is a pure term insurance policy which comes with inbuilt terminal illness benefit. The plan provides life coverage till the age of 80 years.  As an online term plan, the process of policy purchase is very simple and hassle free. The plan also provides additional rider benefit as accidental death rider benefit and critical illness benefit in order to enhance the coverage of the policy 

Aviva iLife Plan

Aviva iLife is a pure protection plan which provides life coverage to the family of the policyholder at a very affordable premium rate. The policy provides a death benefit to the family of the insured in the event of the uncertain demise of the insured person. Apart from death benefit the plan also provides tax benefit under section 80C and 10(10D) of Income Tax Act 1961.  

Bajaj Allianz eTouch Online Term Plan 

Bajaj Allianz eTouch Online Term Plan is known as one of the best term insurance plan, which provides life protection to the family of the policyholder at a low premium rate. As a non-participating pure term insurance policy, Bajaj Allianz eTouch Online Term Plan offers the 4 different life cover options to choose from. Apart from death benefit the plan also provides tax benefit under section 80C and 10(10D) of Income Tax Act 1961.  

PNB Metlife Mera Term Plan 

As one of the best term insurance plans, PNB Metlife Mera Term Plan offers life protection to the family of the insured at a low premium rate. PNB Metlife Mera Term Plan also offers the option of increasing monthly cover with 12% per annum. Moreover, the policy also provides coverage for a spouse under the same policy. Apart from death benefit the plan also provides tax benefit under section 80C and 10(10D) of Income Tax Act 1961. 

Claim settlement Ratio of term Insurance Companies 

Insurance Provider	Death claims received	Claim settlement ratio	Death Claims Paid	Claims Pending
LIC	7,55,901	98.31%	7,42,243	0.50%
Max Life	9,223	97.81%	8,804	0.10%
Birla Sunlife	8,436	94.69%	8,055	1.70%
Tata AIA Life	3,873	96.01%	3,659	1.00%
Star Union Daichi	1,266	84.05%	1,191	0.30%
ICICI Prulife	12,309	96.68%	11,546	0.80%
PNB MetLife	2,466	87.14%	2,290	1.50%
Bajaj Allianz	20,661	91.67%	18,978	3.00%
Kotak Mahindra Life	2,686	91.24%	2,437	3.20%
HDFC Life	12,189	97.62%	11,031	2.30%
SBI Life	14,876	96.69%	13,303	3.20%
Sahara Life	778	90.21%	700	3.60%
Aegon Life	460	97.11%	413	0.20%
Canara HSBC	576	94.95%	516	3.10%
Exide Life	3,432	96.40%	2,955	1.60%
Reliance Life	18,142	94.53%	15,211	5.80%
Future Generali	2,160	89.53%	1,808	1.80%
Aviva Life	1,690	90.60%	1,396	0.50%
Bharti AXA Life	1,112	92.37%	900	2.90%
IDBI Federal Life	1,017	90.33%	736	4.30%
India First Life	1,655	82.65%	1,195	5.00%
Shriram Life	1,960	63.53%	1,307	11.20%
DHFL Pramerica	953	90.87%	545	6.50%
Edelweiss Tokio	119	93.29%	68	5.00%

**Claim settlement ratio for the year 2015-16   

While looking for a term insurance policy, one of the major points to consider is claim settlement ratio.Claim Settlement ratio of a company informs you about the number of policies that are settled by paying back the claims in case of death. 

For most of the people, even the best term insurance plans become quite tricky to understand as the facts & figures used in these products are not easy to relate to. This is one of the major reasons that IRDA has made it mandate to use simple calculation methods to help users calculate Claim settlement Ratio.

The calculation of Claim Settlement Ratio is based on the total number of claims received by the insurance company against the total number of claims settled by it.

To further simplify, the formula used for it is: Total numbers of Claims Settled /Total number of Claims Made

Let’s say for an example, an insurance company has received 5000 claims in a financial year and it settled 4800 claims amongst those 5000 claims in the same financial year.

Thus, the CSR comes to be: 4800/5000 = 96 percent

Claim Rejection Ratio = (5000-4800)*100/5000 = 4 percent

Let’s suppose 100 claims are still waiting to be processed by the company. In that case, the pending ratio will be: 100/5000*100 = 2 percent

The reason behind keeping these calculations simpler is to make the buyers understand it easily, which eventually enables them to make a fair decision after looking into CSR details.

Claim settlement ratio has been chosen to rate the insurance companies because it is the only ratio which could be of use to customers while they select the policy. High claim settlement ratio shows the insurer is reliable and could be trusted for taking term plans whereas the low ratio indicates that the credibility of insurer is less and therefore they won't attract many customers because of their inability to settle claims.

Looking at the Claim settlement ratios of various companies it is clear that Life Insurance Corporation of India, MaxLife, Birla Sunlife, Tata AIA Life, Star Union are the top 5 insurance companies that have fared well in terms of settling their claims and hence stand a good chance of gaining customers' attention for a Term Insurance Plan.LIC performs the best in this regard because the company being a core Life Insurer has settled the maximum claims for Term plans and has rubbished the “Do not take Term insurance from a Life Insurer” Norm. 

It is a suggestion to all the customers that they make their choices wisely depending on the past performance of the insurers evaluated through their Claim Settlement ratios. Besides that age, health and income of the individual are of ample importance because depending on that only would the insurer decide on the sum insured, premium, term etc. Rest, the provided list is good enough to choose the best term insurance plan. 

However, there are also such factors that might lead to the rejection of your claim. Few of them include:

Misrepresentation of Data:

Sometimes, the lack of information or wrong information shared by the insured in the application form (provided by the insurance company) can lead to the claim rejection. If the person buying the insurance hasn’t answered the questions or provided the data & information clearly at the time of buying insurance, it might also lead to lapse of claim.

Fraud: 

There have been many cases where the customers have tried to fool the company and make extra money by making fraud claims. For instance, many times the customers quote a much higher value of the insured product than the real damage cost incurred, in order to extract more money from the insurer. Thus, insurance companies follow a thorough procedure to check the authenticity of the claims made, to avoid any losses.

Contracts:

 It’s a very common phenomenon amongst the policy buyers to ignore those teeny-weeny terms & conditions printed on the contract while signing it. For us, going through the list of terms & condition has always been an unimportant task; however, that’s where we get trapped and then we have to pay its price later on. That’s why, it advisable to take your time and thoroughly analyze the contract before signing it. In case, you get stuck at any point get it clear from the agent to avoid any confusion later on.

Nominee:

Every year, many claims are rejected by the insurer on the grounds that the nominee was not present at the time of claim settlement. Therefore, it’s really important for a nominee to be present for claim settlement; otherwise, the claim can be rejected. Furthermore, if there is any ongoing dispute going on between two parties that has got the involvement of the legal heir or the nominee of the insurance, its need to be settled before claiming the insurance as the insurance companies don’t entertain such cases in order to avoid any involvement in such disputes in future. 

Before we conclude this article, it’s important to mention that you shouldn’t make your decision solely based on the Claim settlement ratio of an insurance company.  This is because, though you get a fair idea with CSR about the number of claims settled by an insurer in one particular year, it’s still doesn’t give you any clear idea on why other claims were rejected.

There could be a lot of reasons leading to the rejection of claims by the insurance company such as fraud, misrepresentation/non-disclosure of the facts or delay in submitting the required documents by the buyer. Hence, you need to be smart and be true & clear about the facts shared with your insurer while buying a policy which will eventually make the life much easier for your nominee.

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