Term Insurance Claim Settlement Ratio is one of the important attributes to measure a company’s performance and customer satisfaction. Claim Settlement Ratio for Term Life Insurance can go to as high as 99%. Based on the latest stats, we have provided below the complete list of Claim Settlement Ratio for various Life Insurance companies in India. The Ratios provided below has been updated based on information and stats as per latest quarter. The Insurance Regulatory Authority of India (IRDA) officially releases this data to the general public.
Purpose of Term Insurance Claim Settlement Ratio:
If you mean what percentage of claims gets paid, it’s 100% after the first two years. In the first two years, an insurance company is allowed to deny a claim if a) the cause of death is suicide or b) there was “misrepresentation” on the application.
Why does Term Insurance Claim Settlement Ratio differ from one company to other?
Normally it depends on the clarity of process and attitude towards customers claim. However another reason is the size of customer base.
Companies with older base are more likely to have higher clam settlement ratio than newer ones.
Reason being the Insurance claim within first 2-3 years is more prone to concealing of facts by the customer.
Term Insurance Claim Settlement Ratio
|Insurance Claim settlement ratio|
|Tata AIA Life||94.47%|
|Star Union Daichi||94.08%|
|Kotak Mahindra Life||90.73%|
|Bharti AXA Life||80.00%|
|IDBI Federal Life||84.79%|
|India First Life||72.21%|
Why does LIC have best Term Insurance Claim Settlement Ratio
You can see clearly in the above table that LIC has best Term Insurance Claim Settlement Ratio in comparison to other private players.
This is because while LIC is a corporation other are privately held companies. For LIC the goal is welfare for others it is profit.
But then why private insurers can give low premium rates for their risk. It is because they litigate more and settle less.
The same has been observed by many consumer courts throughout the country, that private players are more indulged in litigation to delay payment and thus adjust risk in between.
Life Insurance Rules for Beneficiaries:
The beneficiary, or someone on behalf of the beneficiary (it could be the broker), calls the carrier’s claims department and asks for a claims kit. The personnel in this department are usually very sympathetic and efficient.
Upon receipt, the claim form is completed and returned to the company with a copy of the death certificate. Within a week or two the benefit is paid out.
Steps to Improve Term Insurance Claim Settlement Ratio
Certain amendments to Insurance Act and new notifications were issued by IRDA to improve the Term Insurance Claim Settlement Ratio.
If the insurance company is able to establish fraud within 3 years, then it can cancel/withdraw the policy. Moreover, in such a case, they can deny a death claim and also deny refund of premium.
Claim Settlement Ratio Term Insurance Claim Settlement Ratio IRDA
In case insurance policy is called into question due on ground of misrepresentation or suppression of a material fact (not amounting to fraud) within 3 years, the insurance company shall refund the entire premiums paid till date of withdrawal. In this case too, they can deny/repudiate a death claim.
This is applicable for all types of life insurance plans such as term insurance, traditional plans and unit linked insurance plans.
Notification on ULIPs
In case of Unit Linked Insurance Plans (ULIPs), the premiums collected under the policy up to the date of repudiation/withdrawal of policy shall be refunded. Please note the amount refunded shall have no relevance to the fund value.
In case you have revived the ULIP and the policy is called into question within three years of revival, the insurance company will pay: Fund Value as on date of policy revival + Entire premium paid for revival and thereafter.
More Details on Claim Settlement Ratio
Readers must note that the Claim Settlement Ratio numbers provided above has been updated based on inside information and also from the official data from IRDA. Claim Settlement Ratio is one of the important factors to be considered while taking up an Insurance policy.
Therefore, Claim Settlement Ratio chart we provided on FinApp hopes to give you clear idea if you are in confusion as to which insurance company should be choosen.
Note that Claim Settlement Ratio figures mentioned above may be slightly different compared to the other websites.
The reason for this mismatch in the Claim Settlement Ratio is due to different sources of information with which this article is given.
However we can guarantee you that these Claim Settlement Ratio numbers are 99% accurate and we constantly take necessary precautions to make it that way.
Conclusion: Term Insurance Claim Settlement Ratio
We cannot blame a company for low Claim Settlement Ratio for Term Life Insurance claims. However, companies cannot ignore this Ratio as customers do see it before buying an life insurance policy.