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Claim Paid Ratio of Life Insurance Companies?

15/09/2022 |

Given the uncertainty of life today, term insurance has become a necessity. The main objective of buying a term plan is to ensure that your family gets financial assistance when you are not around. The family can use the financial aid received from your term insurance policy to pay for their living expenses, achieve their life goals and sustain their standard of living in your absence. Buying a term insurance plan is even more critical when you are the sole breadwinner of the family.
 

Importance of Selecting the Right Term Plan and Provider
 

However, given the multiple term plans available in the market today, it is natural for you to get confused regarding which term insurance policy to buy. To ensure you invest in the right term plan, be sure of the purpose of buying the term plan. Then, assess your financial requirements and that of the dependents. This will help you decide the coverage that will be sufficient for your dependents.
 

Once through, it is beneficial to estimate your affordability. Check if the premiums of your term plan easily fit your pocket. You can use an online term plan calculator for this. But do not make your decision solely based on the cost-effectiveness of a particular term plan.
 

You can also talk to expert advisors who can assist you in buying the right plan. When you buy an online term plan, you might not get the help you need. The experts will be able to understand your financial goals and needs and suggest an appropriate plan to you.
 

Apart from assessing these factors, understand the life insurance claim settlement ratio of the insurance company. The main purpose of buying a term plan is to make sure that your nominee or legal heir gets the sum assured after your demise. If you do not want your loved ones to struggle to get the benefits, check the claim settlement ratio of the insurance company.
 

Here is everything you need to know about the claim settlement ratio:-

 

 


The claim settlement ratio, also known as the claim settlement ratio, reflects the number of insurance claims settled against the total number of insurance claims filed in a specific financial year.
 

For instance, if the claim settlement ratio of an insurance company is 80%, it implies that the insurer successfully settled 80 death claims out of every 100 insurance claims received. The remaining 10% of the insurance claims were rejected by the insurance company.
 

When buying a term plan, check the life insurance claim settlement ratio. Each year, the Insurance Regulatory and Development Authority of India (IRDAI) publishes the claim settlement ratio of the insurance companies in India. The claim settlement ratio is also on the official website of the insurer.
 

How is the claim settlement ratio calculated?
 

The claim settlement ratio or the claim settlement ratio (CSR) can be calculated using the following formula:

CSR = (Number of claims settled by the insurer/number of claims received by the insurer) *100

 

So, for instance, Company X received 200 claims but settled 190 of these claims in a financial year. In this case, the claim settlement ratio of Company X is
 

(9800/1000) *100 = 98%

98% claim settlement ratio, implying that for every 100 claims received in the financial year, Company X settled 98 of the claims.
 

In all, the insurer you select must have a smooth, reliable and efficient claim settlement process with a more claim settlement ratio so that your family has a high chance of receiving compensation for their financial security. 
 

How can you assess the settlement process of life insurance companies?
 

When buying a term plan, use these parameters to measure the claim settlement process of life insurance companies:
 

  1. Claim settlement ratio: 

As mentioned, the top factor that can help you assess the claim settlement process of life insurance companies is the claim settlement ratio.
 

Claim turnaround time:
Apart from checking the life insurance claim settlement ratio, assess the turnaround time (TAT) of the insurer. Turnaround time indicates the time taken by the insurance company to settle a term insurance claim. A short TAT means the claim settlement process is efficient and fast.
 

  1. Claim benefit amount:

    While buying an online term plan, do not just focus on the life insurance claim settlement ratio. Also, evaluate the benefit amount that the insurance company has settled. An insurer may have a high claim settlement ratio but a lower percentage in paying the benefit amount.

    Therefore, ensure that the insurance company scores well on both parameters - the claim settlement ratio and the benefit amount.

  2. Claim settlement services:

    Most life insurance companies appoint a dedicated claim settlement team to register and settle insurance claims. This service facility ensures that your family will get dedicated support during claim registration, filing documents, etc.

    Moreover, efficient claim settlement services assure that the benefit amount will be timely paid to the nominee. So, when buying a term plan, check how dedicated and attentive their claim settlement services are.

 

Summing Up
 

Overall, assessing the life insurance claim settlement ratio is of critical importance. However, do not assess the claim settlement ratio alone. Instead, consider it in conjunction with other factors, such as the benefit sum, TAT, services, etc.
 

If you are looking for efficient and reliable claim settlement services, consider the TATA AIA term insurance plan. Filing a claim for our term plan is smooth, speedy and easy. 
 

L&C/Advt/2022/Sep/2142

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TATA AIA Life Insurance Co. Ltd will send you updates on your policy, new products & services, insurance solutions or related information. Select here to opt-in.

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TATA AIA Life Insurance Co. Ltd will send you updates on your policy, new products & services, insurance solutions or related information. Select here to opt-in.

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Tata AIA Life Insurance

A joint venture between Tata Sons Pvt. Ltd. and AIA Group Ltd. (AIA), Tata AIA Life Insurance is one of the leading life insurance providers in India. We post everything you need to know about life insurance, tax savings and a variety of lateral topics such as savings and investments in this space. You can access and read a host of different blogs, articles and pages at the Tata AIA Life Insurance Knowledge Center or get in touch with us with any queries or questions!

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  • Insurance cover is available under the product.
  • The products are underwritten by Tata AIA Life Insurance Company Ltd.
  • The plans are not a guaranteed issuance plan, and it will be subject to Company’s underwriting and acceptance.
  • For more details on risk factors, terms and conditions please read sales brochure carefully before concluding a sale.
  • This blog is for information and illustrative purposes only and does not purport to any financial or investment services and do not offer or form part of any offer or recommendation. The information is not and should not be regarded as investment advice or as a recommendation regarding any particular security or course of action.
  • Please know the associated risks and the applicable charges, from your Insurance agent or the Intermediary or policy document issued by the insurance company.
  • Every effort is made to ensure that all information contained in this blog is accurate at the date of publication, however, the Tata AIA Life shall not have any liability for any damages of any kind (including but not limited to errors and omissions) whatsoever relating to this material.
  • Tata AIA Life Insurance Company Ltd. (IRDA Regn. No. 110 ·CIN:U66010MH2000PLC128403. Registered & Corporate Office: 14th Floor, Tower A, Peninsula Business Park, Senapati Bapat Marg, Lower Parel, Mumbai 400013. Trade logo displayed above belongs to Tata Sons Ltd and AIA Group Ltd. and is used by Tata AIA Life Insurance Company Ltd under a license. For any information including cancellation, claims and complaints, please contact our Insurance Advisor/Intermediary or visit Tata AIA Life's nearest branch office or call 1-860-266-9966 or write to us at customercare@tataaia.com. Visit us at www.tataaia.com

     

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TATA AIA Life Insurance Co. Ltd will send you updates on your policy, new products & services, insurance solutions or related information. Select here to opt-in.

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