A term insurance claim is filed by the policy beneficiary to the insurance company in order to avail of the death benefit in case of the policyholder’s unfortunate demise. A majority of insurance companies offer a seamless claim processing facility so that the beneficiary can file a claim and avail of insurance coverage seamlessly.Read more
Claim Settlement Ratio is the percentage of claims settled by an insurance company in a Financial year against the total number of claims made in the same year. This simply means that it is the claims paid against the claims made in the FY. For example, if you have selected a company with 95% CSR, this means that the insurance company has settled 95 claims out of 100. Apart from Sum assured, policy term, CSR is one of the important aspects that one should always consider before purchasing a term insurance plan. Every insurer has a claim settlement ratio that varies every year.
Now, what is a good claim settlement ratio? Is a big concern these days. How to select a company based on CSR? So it is quite a simple concept. The higher the % of claims settled, the better are the chances that your claims will be approved and then settled without any hassle. CSR also determines the stability and the finances of a company. With the claim settlement ratio of 90% or above, an insurance buyer can be sure that the insurance company is safe and financially stable as they have cleared the claim amount of most of their customers.
A Term Insurance Claim Settlement is computed with the following formula:
CSR = (Total number of settled claims in a year/Total number of claims in a year) X 100
For Instance, Company X settled 8,500 claims out of the 10,000 claims for 2019-20. So as per the formula, 8,500/10,000X100, the CSR will be 85%.
Claim settlement of every insurance company is published by the IRDAI in their Annual Reports. You can check the CSR ratio of FY2019-20 on the IRDAI website.
At the time of filling a term insurance claim, the amount of settlement that is provided by the insurer is the maximum benefit that a family/nominee receives after the death of the policyholder. If you are choosing an insurer with a high CSR, then you can expect the company to offer benefits to you and your family. This, in turn, make sure that you or your dear ones will not be affected by the life uncertainties and increasing living standard. It is advisable to choose an insurance company with a high claim settlement ratio that ensures a quick and hassle-free settlement Process.
The main objective of buying term insurance is to provide financial protection against unfortunate events. However, it will be of no use if the insurer is not able to provide you claim easily. On the other hand, if the insurance company provides you a claim, then your family might have to go through a simple, transparent, and smooth claim process.
The CSR indicates the ability of an insurance company to pay the sum assured amount to you or your nominee/legal heir. If the insurance company is maintaining a high value of CSR over a long period, then they are reliable in paying claims smoothly and hassle-free.
As we have discussed, the claim settlement ratio helps determine the claim trustworthiness of the company. Below mentioned are the CSR for different term insurance companies as per IRDAI Annual Report 2019-20:
|Insurance Companies||Claims Paid in 2019-20||CSR 2019-20|
|Max Life Insurance Company||15342||99.22 %|
|HDFC Life Insurance||12509||99.07 %|
|Tata AIA Life Insurance||2954||99.06 %|
|DHFL Pramerica Life Insurance||560||98.42 %|
|Exide Life Insurance||3404||98.15 %|
|Reliance Life Insurance||7866||98.12 %|
|Canara HSBC Life Insurance||1252||98.12 %|
|Bajaj Allianz Life Insurance||11887||98.02 %|
|Aegon Life Insurance||344||98.01 %|
|ICICI Pridential Life Insurance||11212||97.84 %|
|Aditya Birla Sun Life Insurance||5035||97.54 %|
|Aviva India Life Insurance||790||97.53 %|
|Bharti AXA Life Insurance||1285||97.35 %|
|PNB MetLife Insurance||4241||97,18 %|
|Life Insurance Corporation Of India (LIC)||733809||99.69 %|
|Indiafirst Life Insurance||2166||96.65 %|
|IDBI Federal Life Insurance||1366||96.47 %|
|Kotak Mahindra||3225||96.38 %|
|Future Generali Life Insurance||1089||95.28 %|
|SBI Life Insurance||21257||94.52 %|
|Shriram Life Insurance||2816||91.61 %|
|Sahara India Life Insurance||585||89.45 %|
|Edelweiss Tokio Life Insurance||272||83.44 %|
Information Sourced from IRDAI Annual Reports 2019-20
**Disclaimer -Policyholder does not endorse, rate, or recommend any particular insurer or insurance product offered by an insurer.
Term insurance is a pure protection plan that provides financial protection to your family in case of your unfortunate demise. Following are the different types of term insurance claims:
There are many different steps involved while filing a claim on a term insurance plan. In case of unfortunate death of the insurance holder, the dependents (family members) or beneficiaries under the term insurance policy should inform the insurer as soon as possible. To support the claim filed, it is necessary to submit all the required documents. However, before intimating the insurance company, the beneficiary should keep some important facts in mind.
In order to enable the insurer to start the process of claim, the nominee should inform the insurance company as soon as possible. The required details for the intimation of claim are the name of the policyholder, policy number, date of birth of the insured, place of death, the cause of death, the name of the beneficiary, etc. The beneficiary can avail of the claim form either from the nearest branch of the insurance company or can even download it from the website of the insurance company. Moreover, the beneficiary can also fill the form online and file the claim.
The documents that should be kept handy while filing the claim are:
If a claim is made within the 3years of policy issued, the insurer does an additional investigation in order to ensure it is a genuine claim. Following checks should be done:
In case the insurance holder dies due to suicide, murder or accident then panchanama, police FIR report, and post mortem report will be required.
The beneficiary should submit all the required documents as early as possible to speed up the claim process and avoid any delay.
According to the Insurance Regulatory and Development Authority (IRDA) of India, it is mandatory for all the insurance companies to settle the claim within 30 days. The claim should be settled by the insurer from the date the beneficiary submits the claim form along with all the required documents. In case, the claim requires additional investigation then the insurer is obligated to complete the process within 6 months from the date of receiving the written intimation of the claim.
Upon the maturity of the insurance policy, the insurer generally sends an intimation to the life assured along with a discharge voucher for at least 2-3 months in advance of the maturity date providing details like the payable maturity amount.
The life assured is required to sign the discharge voucher – a receipt and then sent it to the insurer along with the original bond of the policy to make payment. If the policy has been allocated in favour of any other person or object- such as a housing loan company. The claim amount will be payable to the person who is the assignee and that individual will give the discharge.
Term insurance coverage applies to both unnatural and natural death. In the case of suicide, the claim is settled after one year of taking the policy. Inclusion and exclusion of the policy depend upon the risk factor of the policyholder. Thus, the benefit of non-smokers will be different in comparison to that of smokers. However, most of the benefits offered by term insurance plans will remain same and the coverage varies from plan to plan.
Though the process to raise a claim is quite easy and convenient but still, it gets rejected sometimes because of the following reasons:
Disclaimer – All Savings are provided by the insurer as per the IRDAI approved insurance plan. Standard T & C applies.
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