Claim Settlement of Life Insurance Companies – Everything You did not Know
We live in a country where there is no social security cover. Therefore, purchasing a life insurance plan becomes the only option for securing your family’s future financial security. The primary purpose of buying a life insurance plan is that it comes in handy in case of an emergency. It acts as a promise of financial assistance to your family after your sudden demise.
But what if your beneficiaries are not given the insurance benefits after your demise? What if the claim settlement never goes through?
Moreover, if your beneficiaries are entirely dependent on the insurance proceeds, an unsettled claim can come as a huge financial setback. Therefore, it is essential that you check the claim settlement process of the company from which you are purchasing your policy.
What is Claim Settlement?
When the beneficiary of a policyholder raises a claim by the specifications of the policy statement, the insurer conducts a review to validate the claim.
Once the insurance company has validated the claim, they disburse the requisite amount in the name of the concerned nominee or beneficiary. The amount provided is known as the claim amount, and the whole process is known as the claim settlement process.
Why is Claim Settlement Important?
Losing a family member can be extremely challenging both mentally and emotionally. While the pain of bereavement can last for a long time, the financial support that a life insurance plan provides can help the family cope up to some extent.
However, some insurance companies take a lot of time to process the claims made by the nominees. Their claim process is long and complicated, which causes a delay in the disbursement of the requisite amount. This delay leaves the policyholder’s family in a financial crisis.
Therefore, it is imperative to check the claim settlement process of an insurer before making a purchase.
How to Judge Claim Settlement of a Life Insurer?
Checking an insurer’s CSR or Claim Settlement Ratio is the best way to judge their claim settlement process. The CSR is defined as the number of claims cleared by an insurance company in a specific period. The ratio acts as an objective yardstick to find the reliability of the insurer.
To check the CSR of an insurer, one can visit the IRDA (Insurance Regulatory and Development Authority) website and check their annual report. This report published by IRDA contains various details on the performance of insurance providers in the country, such as;
- The CSR of the previous year
- Number of policies sold
- Amount of premium obtained
Below is a list of some leading insurers in India and their claim settlement ratios.
Top 5 Insurers by CSR
- Max Life Insurance (98.26%)
Well-known for solving all of their customers’ problems (100 percent), Max Life Insurance is the leading insurance provider when it comes to claim settlement ratio. With a CSR of 98.26 percent, the company surpasses the CSR of LIC India (A government-owned insurer).
Max Life Insurance also boasts Rs. 52,237 crore assets under management and 221 offices around the country.
- Tata AIA Life (98.00%)
A joint venture between AIA group and TATA group, TATA AIA Life is another trusted insurance provider in the country. Boasting a CSR of 98.00 percent, the company is the second-best private insurer when it comes to claim settlement process.
- ICICI Prudential Life (97.88%)
Being India’s first private insurance company, ICICI Prudential is a well-known name when it comes to selling insurance. Highly committed to fulfilling every need of their customers, the company has a claim settlement ratio of 97.88 percent.
- HDFC Standard Life (97.80%)
Standing third in the list of private insurers by the volume of business, HDFC Standard life is also a leader when it comes to claim settlement process. With a CSR of 97.80 percent, HDFC has a good record of settling all their customers’ grievances.
- Bajaj Allianz Life Insurance (92.04%)
Bajaj Allianz Life Insurance is a joint venture between Bajaj Finserv and Allianz SE. The company is well-known for providing services that combine technical expertise of Allianz and the in-depth market experience of Bajaj. Known for solving more than 97 percent of its customer’s grievances, the company also has a CSR of 92.04 percent.
Well, there it is, the list of best insurance providers of the country by claim settlement ratio. Buying a policy from one of these insurers can help in ensuring an easy and successful claim settlement.
However, while the CSR of an insurer is essential, some other factors must be considered before making a purchase.
Other Factors to Consider
- The Price Tag
It is always a good idea to choose a policy that fits in your budget. If you purchase a policy whose premiums are expensive, it might affect your financial plan. Therefore, before going for a policy, compare products offered by different insurers. This will help you in finding a product that not only provides you security but also complements your financial plan.
- Additional Riders
Every insurer provides a bunch of other riders with their life insurance plans. Check if the insurer offers all the essential riders you might need for a comprehensive cover. Some of these include accidental death benefit rider, critical illness rider, premium waiver benefit rider and accidental disability benefit rider.
‘Summing Up’
The last thing you want in your absence is for your loved ones to run from pillar to post to get financial support.
By choosing an insurance provider who has a hassle-free claim settlement process, you will not only secure your family’s financial future but also ensure that they will receive the financial support you have left them on time!
