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Importance of Claim Settlement Ratio in India

The claim settlement ratio is one of the most important aspects of the Indian insurance industry.  The claim settlement ratio essentially highlights the aspect of the number of claims settled out of the complete claims obtained by the insurance sector.

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In case an individual intends to buy a term insurance policy, the claim settlement ratio is one of the principal factors that should be taken into account. Buying a term plan is important to secure the financial future of the family. However, before buying the term insurance plan, it is better to check the claim settlement ratio of the life insurance company.

The claim settlement ratio is a measurement used for assessing the reliability of the insurance company in terms of paying the claims.

But wait, let me tell you something

The claim settlement ratio can be calculated by using the following formula:

Claim Settlement Ratio= The total number of claims paid during the period/ the total received claims

The IRDAI publishes and makes a ratio of all the insurance companies in India, which is brought into the public domain in the initial month of the calendar year. A policyholder should not just take into account the ratio of the companies but should also observe the number of claims received by the company.

Note: Now that you know that the Importance of Claim Settlement Ratio in India, you should also get to know about what is term insurance to buy a term plan for your loved ones.

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How Consistent Should be the Claim Settlement Ratio?

To simply put, regardless of whether an individual buys a term insurance plan or a life insurance plan, etc. claim settlement ratio of the insurance company is important. Besides, the consistency of the claim settlement ratio holds utmost significant importance. While selecting the insurance company, it is advisable to look for the claim settlement ratio of the companies in the recent five years.

No wonder the rule is simple smaller is the range of the CSR, reliable and better is the insurance company. For instance, the insurance company with a ratio in the range of 90% to 96% is more reliable compared to a company with the CSR in the range of 75% to 93%.

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Claim Settlement Ratio of Life Insurance Companies in India

The table below shows the claim settlement ratio of the various life insurance companies in India and is as per the yearly report of IRDAI 2019-2020:

Insurance Companies Complete Number of Claims Claims Paid Claims Repudiated Claims Rejected Death Claim Settlement Ratio
Aditya Birla Sun Life 5162 5035 108 0 97.54%
Aegon 351 344 7 0 98.01%
Aviva 810 790 11 4 97.53%
Bajaj Allianz 12127 11887 237 0 98.02%
Bharti AXA 1320 1285 33 0 97.35%
Canara HSBC OBC 1276 1252 22 0 98.12%
Edelweiss Tokio 326 272 54 0 83.44%
Exide Life 3468 3404 26 0 98.15%
Future Generali 1143 1089 51 0 95.28%
HDFC 12626 12509 54 15 99.07%
ICICI Prudential 11460 11212 153 0 97.84%
IDBI Federal 1416 1366 45 0 96.47%
India First 2241 2166 66 0 96.65%
Kotak Mahindra 3346 3225 112 0 96.38%
LIC 758916 733809 6124 2172 96.69%
Max Life 15643 15342 120 0 99.22%
PNB MetLife 4364 4241 123 0 97.18%
Pramerica Life 569 560 7 0 98.42%
Reliance Nippon 8017 7866 149 0 98.12%
Sahara 654 585 10 13 89.45%
SBI Life 22490 21257 1157 0 94.52%
Shriram 3074 2816 195 58 91.61%
Star Union 1248 1210 35 0 96.96%
TATA AIA 2982 2954 28 0 99.06%

Disclaimer: Policybazaar does not endorse, rate or recommend any particular insurer or insurance product offered by an insurer.
What is the Process to Settle the Claims?

Take a look below to understand the process of settling the claims:

Reporting

At the onset, an individual should make sure that the claims are reported on time. The claims can be easily reported at the respective branch, online or central office. The policyholder can also contact customer support or drop an email. Reporting is of prime importance and for a policyholder is more approachable.

Quick Processing

The processing of the claim needs to be quick. Moreover, the process of the claim settlement should not be tedious and the customer should have a hassle-free experience. The less is the average turnaround time to settle the claim, the better it will be.

Settlement

Once all the relevant documents are duly assessed and approved only then the final settlement will take place. The claims need to be settled as quickly as possible right from the intimation date.

How to Avoid Rejection of Claims?

To enjoy the benefits of the insurance policy and not face a claim rejection, the policyholder should take some important steps. It generally starts when the policy papers are being signed by the policyholder. This is the time when the insurance company assesses every aspect of the policyholder such as the risk profile, and so forth and accordingly underwrites the policy.

The following are the steps that should be followed to avoid claim rejection:

  • To begin with, the policyholder should disclose all the information to the insurance company. Specifically in terms of smoking habits and medical condition do not give any false information; however, assessing the risk will vary from insurer to insurer. In case an individual is an avid smoker or has a critical ailment that was not disclosed earlier and the insurance company gets to know about it at the time of claim chances are that it could get reject.
  • When purchasing the insurance plan, it is highly recommended that the policyholder should fill the form themselves. Do not let an agent fill the form as chances are that the agent might miss out on some important information.
  • During the free-look period, the policyholder should check the policy wordings and carefully examine the terms and conditions. In case, the policyholder is not satisfied with any clause, then the policy can be returned to the insurance company for a refund.
  • As soon as the policyholder buys the policy, the first person to be informed is the nominee. In case there is a need that the nominee needs to raise the claim the person needs to be aware of it. The timely claim filing is important as that would ease the claim settlement process.

By Now, You Should Know

The claim settlement ratio of the insurance provider is a good indicator to provide an insight into the policyholder in deciding the policy. However, it is highly recommended that the insurance policy should not be bought just on the premise of the claim settlement ratio. Whether an individual buys a term insurance policy or any other policy it is equally important to check the coverage being offered by the different plans from the insurance companies.

Invest time before making the final purchasing decision, assess the requirements and zero down the insurance plan that suits and fulfil the needs of the family and the financial future is duly secured.

Note: Check out the best term insurance plan in India and choose one that suits your requirements.


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