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IRDA releases the claim settlement ratio data every year to help in choosing the right insurance company.
The demand for life insurance and health insurance policies has increased rapidly since the the outbreak of Covid-19 crisis. A life insurance policy is the first thing that comes to the rescue in a time of crisis. But, many people buy it blindly just to save tax. If you are planning to buy life insurance, then you should definitely check the claim settlement ratio of the company from which you are buying the policy. It is very important to have a high settlement ratio. A higher settlement ratio means that the insurance company has settled more claims. Insurance experts say that one should buy a policy from a company whose claim settlement record is more than 95%.
What is claim settlement ratio?
Simply put, the claim settlement ratio is the percentage of claim settlements made by an insurance company in a financial year.
In other words, the number or percentage of claims settled by the insurance company relative to the number of death claims received in the financial year is called the claim settlement ratio.
For example, if 1000 death claims have been received by an insurance company in a financial year, and that company has paid the 980 claims as per the policy rules, then the claim settlement ratio of the life insurance company will be 98%. Here the claim rejection rate is just 2%. This means the claim settlement ratio of the insurance company is excellent. A life insurance policy can be taken from this company.
The claim settlement ratio of three to five years should be checked, to find out the exact claim settlement. Insurance regulator IRDA releases the claim settlement ratio data every year to help in choosing the right insurance company.
Claim settlement ratio of insurers
LIC: 96.6%
Max Life: 99.22%
HDFC Life: 99.07%
TATA AIA: 99.06%
Exide Life: 98.15%
Canara, HSBC and OBC: 98.12%
Reliance Nippon: 98.12%
Bajaj Allianz: 98.12%
ICICI Pru: 97.04%
(Source: Irda)
How to claim
The policyholder should check the policy document and fill in the correct information in the form. Do not fill the wrong facts in the form or hide anything.
It is easy to get the claim settlement if the correct information is entered in the policy documents.