Term Insurance Claim Settlement Ratio FY 2020-2021

The term insurance claim settlement report is an important report that all prospective insurance buyers must look at. The claim settlement ratio is the percentage of claims settled against the number of claims received in the financial year. A life insurance company that has a high claim settlement ratio is very likely to pay out your claim too and this is why you should ideally buy your term plan from them. 

Claim Settlement Ratio of 2021

As you can see from the table above, the claim settlement ratios of most of the Indian life insurance companies are very high and healthy. This is mainly because the IRDA closely monitors the insurance industry in India and assures that all the matters related to insurance are taken care of in the best possible way, with the fewest number of disputes. This makes the life insurance companies work more efficiently and as a result, we see the maximum number of claims being paid out, resulting in high claim settlement ratios.

How to Get a Claim Smoothly? 

While the claim settlement ratio of your chosen life insurance company is a good pointer, there are other ways to ensure the claim on your term life plan is paid out smoothly. Since the claim will only be paid out after your demise, you need to inform your family members about the procedure beforehand to ensure there are no roadblocks later on. Here are some tips for you:

• Fill the Application Correctly -It is your duty to fill in the term insurance plan application form in a correct and error-free manner. You cannot afford to make any mistakes at this step, whether voluntary or involuntary. Many people enter incorrect data to hide their lifestyle problems and health issues in an attempt to lower their premiums. This is a harmful practice, as at the time of a claim, the claim can be rejected if the insurer finds out you had lied.
• Pay the Premium on Time  - Another important parameter is to pay the life insurance premium on time to keep the term plan active. If you do not pay the premium, the policy will lapse. This will lead to the cover being taken away. If you die at such a time, your family will not get the claim. It is thus vital for you to pay the premium on time because no one can predict what difficult challenges the future holds. 
• Be Aware of the Exclusions - Every term insurance plan has a set of exclusions. These exclusions need to be read and understood. If the death of the policyholder happens due to any one of the exclusions mentioned, the claim won't be paid out. This will happen even if the insurance provider has a claim settlement ratio of over 99.
• Inform Your Family of the Documentation - The documentation forms the backbone of any term insurance claim process. The documentation needs to happen properly. Tell your family about the process and inform them how to file a claim, how to file the papers and how to submit it. Also, show them where you have kept the original term insurance policy documents so that they can file the claim quickly and smoothly if they need to do so.
• Explain the Claim Process Clearly - The claim process is not very difficult, but needs to be done properly and on time. Tell your family members how to go about it. If you feel your family members won't be able to deal with it at the moment of grief, assign a trusted friend or relative with the task and ensure he or she files the claim duly after your demise.

If you take care of these factors, the claim on your term plan will easily be paid out.

To Sum It Up

The claim settlement ratio of a life insurance company plays an extremely vital role in telling you just how reliable (or unreliable!) the company is. Take a good and hard look at the claim settlement ratio and then choose your insurance provider with care. If a company with a low claim settlement ratio is offering a term plan at a cheap rate, you may not benefit from it, as in the long run, you may end up in loss. So be careful when choosing the term life insurance plan and stay protected in a wholesome manner