Term Insurance Claim Settlement Ratio IRDA (2017-2018)

Term Insurance Claim Settlement Ratio is one of the important attributes to measure a company’s performance and customer satisfaction. Claim Settlement Ratio for Term Life Insurance can go to as high as 99%. Based on the latest stats, we have provided below the complete list of Claim Settlement Ratio for various Life Insurance companies in India. The Ratios provided below has been updated based on information and stats as per latest quarter. The Insurance Regulatory Authority of India (IRDA) officially releases this data to the general public.

Purpose of Term Insurance Claim Settlement Ratio

If you mean what percentage of claims get paid, it’s 100% after the first two years. In the first two years, an insurance company is allowed to deny a claim if a) the cause of death is suicide, or b) there was “misrepresentation” on the application.

Why does Term Insurance Claim Settlement Ratio differ from one company to other

Normally it depends on the clarity of process and attitude towards customers claim. However another reason is the size of customer base.

 

Term Insurance Claim Settlement Ratio (2017-18)

Insurance Provider

Insurance Claim settlement ratio

LIC 98.19%
Max Life 96.23%
Birla Sunlife 88.45%
Tata AIA Life 94.47%
Star Union Daichi 94.08%
ICICI Prulife 96.20%
PNB MetLife 92.90%
Bajaj Allianz 91.30%
Kotak Mahindra Life 90.73%
HDFC Std 95.02%
SBI Life 95.70%
Sahara Life 89.97%
AegonReligare 95.30%
Canara HSBC 92.99%
Exide Life 86.10%
Reliance Life 95.01%
Future Generali 90.61%
Aviva Life 82.00%
Bharti AXA Life 80.00%
IDBI Federal Life 84.79%
India First Life 72.21%
Shriram Life 65.66%
DHFL Pramerica 57.19%
Edelweiss Tokio 85.10%

Why does LIC have best Term Insurance Claim Settlement Ratio

You can see clearly in the above table that LIC has best Term Insurance Claim Settlement Ratio in comparison to other private players.  This is because while LIC is a corporation other are privately held companies. For LIC the goal is welfare for others it is profit. But then why private insurers can give low premium rates for their risk. It is because they litigate more and settle less. The same has been observed by many consumer courts throughout the country, that private players are more indulged in litigation to delay payment and thus adjust risk in between.

Life Insurance Rules for Beneficiaries:

The beneficiary, or someone on behalf of the beneficiary (it could be the broker), calls the carrier’s claims department and asks for a claims kit. The personnel in this department are usually very sympathetic and efficient.

Upon receipt, the claim form is completed and returned to the company with a copy of the death certificate. Within a week or two the benefit is paid out.

Steps to Improve Term Insurance Claim Settlement Ratio

Certain amendments to Insurance Act and new notifications were issued by IRDA to improve the Term Insurance Claim Settlement Ratio.

If the insurance company is able to establish fraud within 3 years, then it can cancel/withdraw the policy. Moreover, in such a case, they can deny a death claim and also deny refund of premium.

In case insurance policy is called into question due on ground of misrepresentation or suppression of a material fact (not amounting to fraud) within 3 years, the insurance company shall refund the entire premiums paid till date of withdrawal. In this case too, they can deny/repudiate a death claim.

This is applicable for all types of life insurance plans such as term insurance, traditional plans and unit linked insurance plans.

Notification on ULIPs

In case of Unit Linked Insurance Plans (ULIPs), the premiums collected under the policy up to the date of repudiation/withdrawal of policy shall be refunded. Please note the amount refunded shall have no relevance to the fund value.

In case you have revived the ULIP and the policy is called into question within three years of revival, the insurance company will pay: Fund Value as on date of policy revival + Entire premium paid for revival and thereafter.

 

 
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assuredgain

Promoter & Certified Personal Financial Advisor(CPFA) at AssuredGain Wealth and Financial Planners (P) Ltd, a financial planning and wealth management company in Chennai. I hold certification from “The Options Institute” (Chicago Board Options Exchange). I have also completed NSE’s Certification in Financial Markets (Options Trading Strategies Module) and CMP(Certified Market Professional) from NSE.

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