527469 SIP myths you must know!
The claims settlement ratio signifies the percentage of settled claims by the insurer out of the total claims received
Why do you buy a life insurance policy? So that in case of an unfortunate event, your family gets a good chunk of money to lead their lives in your absence. But what if the nominee makes a claim and it gets rejected? This defeats the whole purpose of you buying an insurance and paying premiums religiously.
Before you buy a policy, therefore, you must do a proper research about the claims experience of the insurer from which you are buying the policy. One way to check it out is the claims settlement ratio. The higher the claims settlement ratio, the better the insurer is in terms of settling the claims.
“No one wants their family to rush after the insurance company to get the claim settled in their absence. Hence, it is of utmost significance to identify the right insurance company as your partner which has a successful track record of settling claims raised by their customers. Hence, people must check the Claim Settlement Ratio of the insurance companies,” says Naval Goel, Founder & CEO, PolicyX.com.
What is claims settlement ratio?
The claims settlement ratio signifies the percentage of settled claims by the insurer out of the total claims received. “It is a method to gauge the percentage of life insurance claims an insurer has settled during a financial year against the number of claims received in the period including pending claims from last year. It gives a fair idea about the company’s performance in terms of successfully settling the claims,” says Goel.
There are two claims settlement ratios that you should look at. First, in terms of number of policies and second, in terms of value of claims. We have compiled a list of top five players with best claims settlement ratio in terms of number of policies. We have also given their claims settlement ratios in terms of value. To compare it with India’s most popular and largest insurer player, we have shared LIC’s figures as well.
Max Life has the best claims settlement ratio of 99.12 per cent in terms of number of policies. However, the ratio is below 95 per cent in terms of value. You must choose an insurer that fares better in both the ratios.
“As per IRDAI, the percentage above 95 is considered as a satisfactory claim settlement ratio stating the insurance company is committed to resolving claims,” emphasises Goel.