Buying term insurance is a great way to protect your loved ones financially in the unfortunate event of your death. The best term insurance companies can help secure enough coverage to replace your settled debts, income, or cover expenses your family may face like paying for the education of your children or caring for aging parents. To make your selection easier, we have compiled a list of the best term insurance companies in India in 2022.Read more
Term insurance is an agreement between the insurance company and the policyholder, wherein in case of the policyholder’s unfortunate demise, a specific sum is paid to the life assured’s family by the insurer. Simply put, a term insurance policy is the purest form of life insurance plan that offers comprehensive financial security to your loved ones against the uncertainties of life such as death, disability, terminal illness, etc. Still, unlike other investment policies, these plans do not provide any returns on the premium paid at the end of the policy term.
So, if you are planning to buy a term insurance policy, you should know the risks involved in your life, the number of dependents, their life goals, and what amount would be sufficient for them to lead a financially secure life in case of your absence.
There are several insurance companies available in the market, with each offering a large range of term policies to choose from. It is certainly a tough task to choose the best term insurance plan from this comprehensive list, but you must invest your effort and time in the search of the best term insurance companies as it guarantees peace of mind for you and a burden-free future.
Presently, 24 insurance providers offer term insurance plans in India as per IRDAI Annual Report 2020-21. As discussed, term insurance is a policy that offers a sum assured i.e., the death payout in case of an untimely demise of the policyholder during the policy term. Term plan ensures the financial security of your loved ones, so it is very important to choose an insurer whom you fully depend on. When choosing a term insurance company, you should consider CSR as an important factor. Let’s discuss the CSR of term insurance companies in 2020-21.
Claim Settlement ratio i.e., CSR is the percentage of claims that an insurance company settles in a year out of total claims. This ratio indicates the credibility of an insurer. So, the higher the CSR, the more reliable the insurance company is. Claim settlement ratio is published annually on IRDAI annual report.
A CSR is calculated using the following formula:
CSR = (Total number of claims settled in a year / Total number of claims in a year) X 100
Let’s understand this with the help of an example:
If Company X has settled 9,600 claims out of 10000 claims for 2020-21, the CSR will be 96% i.e., 9600/10000* 100
Let’s take a look at the best term insurance companies in India based on IRDAI CSR values in the year 2020-21 for you to choose and buy the right term insurance plan for your family in the year 2022. The table is updated as per the latest data available. The insurance company with the highest CSR would offer the best term insurance plan. Following is a list of claim settlement ratio (CSR) values of best term insurance companies:
|Term Insurance Company||Claim Settlement Ratio (CSR) 2020-21||Death Claims Paid|
|Bharti AXA Life||99.05%||1875|
|Kotak Mahindra Life||98.50%||4336|
|Reliance Nippon Life||98.49%||9274|
|Aditya Birla Sunlife||98.04%||6347|
|Tata AIA Life||98.02%||4556|
|India First Life||96.81%||2886|
Information Sourced from IRDAI - Annual Report 2020-21
*Disclaimer: “Policybazaar does not endorse, rate or recommend any particular insurer or insurance product offered by an insurer.”
The above table illustrates the claim settlement ratio of term insurance companies. As per the table, Max life, Aegon, Bharti AXA, LIC, and Pramarica life are the top 5 term insurance companies in India with CSR values 99.35%, 99.25%, 99.05%, 98.,62, and 98.61% respectively. The companies having CSR values of more than 95% are considered to be more reliable and smooth in setting claims. So it is always advisable to check CSR before making any purchase decision.
Term insurance plan helps your loved ones become financially independent after you pass away. When buying a term insurance plan, you should always be aware of the best and right term insurance that offers comprehensive coverage at low premium rates. However, before buying a term insurance plan, you should completely research about the insurance company and recognize your insurance needs. Here are some of the factors you should take into consideration before choosing an insurance company:
As discussed above, this ratio represents the number of claims settled in a fiscal year against the total number of claims. This ratio determines the reliability and effectiveness of an insurance company. The high value of CSR indicates the loyalty of the company towards you and also, makes it easy for your dependents to claim insurance in case of your absence, thus they can live life happily and comfortably. The CSR of an insurance company is kept under observation on an annual basis by IRDAI i.e., Insurance Regulatory and Development Authority.
The solvency ratio determines whether the insurance company you choose will be financially capable of settling your claim in case a need arises. IRDAI has mandated that every insurance company should maintain a solvency ratio of 1.5 i.e., called health solvency ratio. This ratio indicates the financial status of the company. So the company should have more possessions and less liabilities, this shows that the company has sufficient funds and is capable of claim settlement.
Term Riders are additional benefits provided by an insurer at the time of buying term insurance plans. They increase the coverage at an extra price. An individual should select an insurance company that offers riders or provide an option to attach/add riders to the base policy. Some of the few common available riders offered by the insurers are Accidental Death Benefit, Waiver of Premium, Critical Illness Rider, and Accidental Total or Permanent Disability Rider.
Strong customer service is an important parameter to consider while buying a term insurance plan. An individual should always select an insurance company that offers good customer care service and has an experienced expert team. While buying a term plan, a customer should always keep in mind that there is a 24X7 customer care service available to solve all their queries and offer assistance when required.
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