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Term Insurance Claim Settlement
Depicts reliability of the insurer
Financial security for loved ones
Allow quick and hassle-free settlement
Ensure that the beneficiary receives the sum assured
Term Insurance Claim settlement is a necessary criteria while choosing a plan. Term plans are the most basic and pure life insurance plans that are not only pocket-friendly but are beneficial too. However, it is important to ensure that the insurance company honors the claim made by the beneficiary of the insured and pay the death benefit in accordance with the policy contract.
A hassle-free process of claim settlement is essential for the policyholder as well as the insurer as it makes claims easy for the insured and enhances the reputation of the insurer. Understanding the process of claim settlement and being aware of the Term Insurance Claim Settlement Ratio (CSR) is very important for policyholders.
What is the Claim Settlement Ratio?
The ratio of claims that are settled by an insurer during a policy year as against the complete claims that the insurer receives during the year is called Claim Settlement Ratio (CSR). For example, if you buy insurance from a company offering 99% CSR, it implies that the insurance company has settled 99 out of 100 claims that they have received during the financial year.
Among the most important factors that determine an insurance policy, term plan claim settlement ratio is considered the primary one along with sum insured, policy tenure, network hospitals, premium amount etc. Thus, CSR is an aspect that is required to consider prior to making a policy buying decision. The insurance claim ratio is calculated for each financial year and is maintained on the official portal of each insurance company. The CSR of an insurance company might vary every year. It is however important to note here that CSR is calculated for all insurance products and is not limited to term insurance only.
The formula to calculate term insurance settlement ratio = (Total number of claims settled during a financial year /total number of claims received by the insurer in that year) x 100
Claim Settlement Ratio of Term Insurance Companies in India
Below is the list of Claim Settlement Ratio of the top term insurance providers in India:
| Name of Insurance Company | Claim Settlement Ratio (CSR) 2020-21 |
|---|---|
| Max Life Insurance | 99.35% |
| Aegon Life Insurance | 99.25% |
| Bharti Axa Life Insurance | 99.05% |
| LIC | 98.62 |
| Dhfl Pramerica Life Insurance | 98.61% |
| Exide Life Insurance | 98.54% |
| Kotak Life Insurance | 98.50% |
| Reliance Life Insurance | 98.49% |
| Bajaj Allianz Life Insurance | 98.48% |
| PNB MetLife Insurance | 98.17% |
| Tata AIA Life Insurance | 98.02% |
| HDFC Life Insurance | 98.01% |
| Aviva India Life Insurance | 98.01% |
| ICICI Prudential Life Insurance | 97.90% |
| Aditya Birla Sun Life Insurance | 98.04% |
| Sahara India Life Insurance | 97.18% |
| Canara HSBC Life Insurance | 97.10% |
| Edelweiss Tokio Life Insurance | 97.01% |
| Future Generali Life Insurance | 94.86% |
| SBI Life Insurance | 93.09% |
Importance of Selecting Claim Settlement Ratio
IRDAI or the Insurance Regulatory Development of India initiated the regularity of the insurance claim settlement ratio of insurance companies, which is calculated in percentage and published annually on the company website of insurers.
For obtaining term insurance plans, it is important to check the CSR of term plans offered by several term companies. With good knowledge of the claim settlement process and the CSR of insurance providers, it is easy to procure the best term plan.
- CSR helps in securing your loved ones with financial security - term plans are bought to allow protection to the beneficiary of the insured against the unforeseen event of death of the insured. However, if the insurer does not comply by the request of the beneficiary of the insured, the whole point of having a term plan is wasted. Moreover, even if the request is approved, it is essential that the process of claim should be hassle- free and simple for the nominee to carry the process forward easily.
- It portrays the reliability of the insurance company - The Term Plan settlement ratio of an insurance company is also the indicator that the company is capable of paying the claim to the beneficiary of the nominee. A consistent high CSR over a period of time is considered as the mark of reliability that the company settles claims smoothly and quickly.
What type of Documents Required for Term Insurance Claims?
Having proper documents is very important for claiming a term insurance. To ensure that the term insurance claim is approved by the insurer, the beneficiary needs to submit some important documents such as;
- Photo ID of the applicant/claimant
- Address proof of the applicant/claimant
- Original documents of the term policy
- Duly filled, signed and attested claim forms
- Attested Death certificate of the insured
- FIR copy/post mortem reports of the insured (in case of accident)
- Medical Records/discharge summary from hospital
- Canceled cheque copy
Frequently Asked Question
With 99.22% CSR, Max Life Insurance is the top term insurance company based on claim settlement ratio for FY 2019-20.
Yes, a claim for term insurance can be rejected by the insurer:
- If the claimant provides false or incorrect facts to the insurance company.
- If payment of the premium of term insurance is not done on time and regularly.
- If the claim is fraudulent and is done by the claimant to make profit.
- If the reason for the death offered in the claim is not included in the terms and conditions of the policy.
In insurance, claim settlement ratio is regarded as one of the indicators to decide the best term insurance company. Thus, the company offering the best CSR is regarded as the best insurer and it depicts the competence of the insurance provider to settle claims efficiently.
The best term insurance company on the basis of CSR for FY 2019-20 is Max Life Insurance with 99.22% CSR, followed by HDFC Life Insurance with CSR 99.07%, and Tata AIA Life Insurance with CSR 99.06%.
Below are the required documents:
- Photo ID of the applicant/claimant
- Address proof of the applicant/claimant
- Original documents of the term policy
- Duly, filled, signed and attested claim forms
- Attested Death certificate of the insured
- FIR copy/post mortem reports of the insured (in case of accident)
- Medical Records/discharge summary from hospital
- Canceled cheque copy
The IRDAI has laid some guidelines according to which the insurance providers must settle claims within a month (30 days) of obtaining all documents needed for the process. In case the insurer needs more time for receiving details of the documents that the claimant has presented even in that case the insurers must complete the claim process in 6 months of the date of intimation of the claim.
Yes, claim of term insurance can get rejected in situations such as:
- If the claimant provides false or incorrect facts to the insurance company.
- If payment of the premium of term insurance is not done on time and regularly.
- If the claim is fraudulent and is done by the claimant to make profit.
- If the reason of the death offered in the claim is not included in the terms and conditions of the policy.
