Life is unpredictable. However, your family’s tomorrow need not be. That is why term insurance is preferred by Indians. Term insurance is a simple life insurance policy. It pays out to your family a large sum of money (termed the sum assured) in the unfortunate event of your death during the policy term. This sum may prove useful for them to cover their day-to-day expenses, pay off their loans, and lead a secure life.
But buying term insurance is not everything about the premium or the sum assured. The most important thing to check may be how effective the insurance company is in settling claims. That is where something called the claim settlement ratio comes into the picture.
What is the Claim Settlement Ratio?
The claim settlement ratio (CSR) is the percentage of claims settled by the insurance company out of the total claims received. In other words, it measures how prompt the insurance company is to pay cash in the event of the policyholder’s death.
Let us assume that a company has received 1,000 claims within a year. If they have settled 980 of them, the claim settlement ratio is 98%. The ratio being higher means that there are more chances that the company will pay at the time of your family’s claim.
Therefore, while buying term insurance, always check the claim settlement ratio of the company. It directs you towards choosing the right insurer.
Why Claim Settlement Ratio Matters
Consider the following: you’ve been paying premiums for years. You rest easy knowing your loved ones are protected. But when you die, if the company refuses to pay the claim, all your planning and effort will go down the drain. That is why it is prudent to select an insurer with a high claim settlement ratio, ideally over 95%.
Now let’s explore some of India’s top insurance companies with the best claim settlement record.
- LIC (Life Insurance Corporation of India)
LIC is a government corporation and one of the oldest Indian companies. It is trusted by millions of Indians. Its claim settlement ratio stands at about 98.5%, which speaks volumes about its reliability. LIC has a huge number of plans, is present in large numbers even in small towns, and is known for its vast network of agents.
- HDFC Life Insurance
HDFC Life is a popular private insurer with a claim settlement ratio of almost 99.68%. It is known for quick settlement of claims, warm customer service, and hassle-free online policy management. Its term policies are flexible and provide valuable riders like critical illness cover.
- Max Life Insurance
Max Life is yet another brand that can be relied upon with an immensely high claim settlement ratio of around 99.5%. It offers economically charged term plans, excellent online services, and smooth claim settlement. Individuals prefer it due to its transparency and reliability.
- ICICI Prudential Life Insurance
ICICI Prudential has a great reach in India as well as near 98.6% claim settlement ratio. It is famous for prompt settlement, extensive online policy options, and good customer service. Its policies provide flexible payout options as well as return of premium options.
- Tata AIA Life Insurance
With a claim settlement ratio of around 99.0%, Tata AIA can be considered extremely reliable. It gives full coverage at minimal premiums and adjustable term insurance policies. Its company name also gives customers assurance.
- SBI Life Insurance
SBI Life has the backing of the State Bank of India, which makes it a secure and trustworthy name. It has a claim settlement ratio of around 97.1%. It has a strong presence throughout the nation and offers simple term plans that are easy to buy and are free from complexity.
- Bajaj Allianz Life Insurance
This insurer offers excellent online software and prompt claim service. It has a claim settlement ratio of nearly 99.0%. Bajaj Allianz offers valuable rider benefits like accidental death benefits and wellness benefits.
- Aditya Birla Sun Life Insurance
Aditya Birla Sun Life has a claim settlement ratio of about 98.1%. It is backed by a strong business house and provides flexibility in term plans. The majority of users appreciate the rewards for health and the ease of online features.
- PNB MetLife Insurance
PNB MetLife is the tie-up between MetLife and Punjab National Bank, and thus it gets the support and reliability. It has a claim settlement ratio of 98.2%. It has a smooth claim process and good family protection plan products.
- Kotak Mahindra Life Insurance
Kotak Life Insurance has a claim settlement ratio of approximately 98.6%. It offers easy plans and online support. It also gains popularity for offering term insurance to NRIs and flexible payment of premium.
Easy Comparison in Words
If you’re wondering which ones are the best, here’s a quick summary. Max Life Insurance leads with the highest claim settlement ratio at 99.5%. Close behind are HDFC Life (99.4%), Tata AIA Life and Bajaj Allianz Life (99.0%), and ICICI Prudential Life and Kotak Life with around 98.6% each. Government-owned LIC follows with 98.5%, then PNB MetLife (98.2%), Aditya Birla Sun Life (98.1%), and SBI Life with 97.1%.
All of these insurance providers have a claim settlement ratio of over 97%, and therefore, they are suitable for your family’s future.
How to Make Sure Your Claim Doesn’t Get Rejected
Even if the company has a good claim ratio, you must do your part properly. Here are some suggestions:
- Tell the truth on your form: Never hide medical issues, smoking habits, or your occupation details.
- Pay premiums on time: Miss payments and your policy lapses.
- Tell your family: Make sure your family knows where to find the policy details.
- Select the appropriate nominee: Nominate your spouse or parent to avoid confusion.
- Have papers ready: Have medical reports, policy documents, and ID proofs ready at one place.
Conclusion
Choosing the right term insurance is not simply low premium and high cover. It’s also trust. A company with a high claim settlement ratio gives your loved ones peace of mind. They know the money will be available when they need it most.
So don’t hurry. Compare policies, examine the claim records, and choose a company that provides quality service and has a good track record. This is for insuring the ones you love the most.
