LIC settles 2.22 crore claims worth Rs 1.35 lakh crore this fiscal

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At a time when the insurance industry has been struggling with higher claims due to COVID-19, Life Insurance Corporation (LIC), the largest insurer by assets under management, has settled more claims compared to last year. The company has already settled 2.22 crore claims so far this year amounting to Rs 1.35 lakh crore. During these testing times, the insurer has also asked policyholders to deposit their documents in any of LIC’s nearby offices and claim the due payment ensuring speedy settlement.

Last year, as of March 31, 2020, LIC’s claim settlement ratio was at 96.69% compared to 97.79% as of March 31, 2019. The death claim settlement ratio is an important ratio to look at before buying from an insurance company, as it tells how good the company is in fulfilling its primary responsibility. The death claim settlement ratio is defined as the number (or amount) of the claim paid by the insurer compared to the total premiums received. For example, if the death claim settlement ratio of the insurer is 98%, it means out of every 100 claims received, the company paid claims for 98 policies.

Life insurance companies have settled 8.46 lakh claims on individual policies, with a total payout of Rs 18,042 crore in 2019-20. The number of claims repudiated was 8,927 at Rs 555 crore. The number of claims rejected was 2,262 worth Rs 20 crore.

For private insurers, last year’s settlement ratio had increased to 97.18% during 2019-20 compared to 96.64% in the previous year. The collated figures for 2020-2021 will be shared by the Insurance Regulatory and Development Authority of India (IRDAI) towards the end of this year, as per the practice.

The latest annual report also states that the industry’s settlement ratio, however, declined to 96.76 % in 2019-20 from 97.64 % in 2018- 19.