Why is knowledge of claim settlement ratio important to make informed insurance buying decisions?
Claim settlement ratio (CSR) is not a new-fangled term in the insurance sector. CSR implies the number of claims an insurance company used to settle a year out of total claims received. You can get a clear picture of your insurance provider from a claim settlement ratio. Companies with a high claim settlement ratio are the most trustworthy, and you can be rest assured that your beneficiaries will receive the claim without any hassle.
What is the claim settlement ratio?
The claim settlement ratio indicates the number of claims paid against the number of claims filed by an insurance company. The claim settlement ratio of term insurance companies acts as an indicator of their integrity. The higher percentage portrays the company as more reliable, and your chances of getting a claim settlement will also increase.
By visiting the official website of the Insurance Regulatory and Development Authority of India (IRDAI), you can find the claim settlement ratio of various insurance companies.
Why is a claim settlement ratio important?
It assures your family’s financial security and stability: The prime objective of buying insurance policies is to offer financial protection to family members under any unpredictable circumstances. If the insurance company tributes your claims, then your family will receive the sum assured in a facile and hassle-free claim process. Thus, you can be assured that your loved ones won’t meet any financial problems in your absence.
Indicates the company’s reliability and credibility: If your insurance company maintains a decent CSR over a considerable period, then it will settle your claim effectively without much delay.
How is a claim settlement ratio is calculated?
You can calculate a claim settlement ratio by using this formula.
Claim Settlement Ratio (CSR) = (Total number of claims settled in a year/ Total number of claims in a year) X 100
Suppose an insurance company settled 9,500 claims out of the 10,000 claims for 2019-2020. Its CSR will be 95% (9,500/10,000*100)
5 quick steps to claim your insurance
The family members of the deceased policyholders often face terrible experiences getting claim settlements against the insurance policy. Follow these 5 steps for a hassle-free claim settlement.
- At first, you should inform and update the insurance company about the death of the insured. You may speak to the service provider directly, or you can inform through the insurance agent.
- Now, you need to fill the Claim Intimation Form (CIF). Mention all the correct information of the policyholder and the nominees of the policy.
- After filling the form, you need to submit all original documents along with their attested copies as mentioned by the insurance company.
- Don’t forget to keep a copy of all documents with you.
- After finishing all these, your documents will be verified and approved.
- And after completion of the investigation, the insurance provider will initiate the settlement process.
Things you should consider before choosing your plan and insurance provider
It won’t be prudent to choose an insurance company without knowing much about its claim settlement ratio. A few things you should consider while comparing term insurance claim ratios of different insurers in India.
- Claim Settlement duration: Before taking the final call, it would be essential for you to check how long the company used to take time to settle a particular claim. This will help you think about the company that possesses a higher ratio and initiates the process quickly.
- Health Record: Very often, small sum assured policies may get settled quickly than those with a bigger sum assured. A trustworthy insurer must have a healthy settlement record for all policies.
- Miscellaneous Parameters: Though these two are the prime parameters that you should check while selecting an insurance company, still don’t overlook other parameters like their overall service quality, the coverage plan, plan ranges, additional rider options, market reputation, etc.
- By visiting the website of IRDAI, you can compare the claim settlement ratios of the top insurance companies in India and choose the company that has the highest ratio.
Reasons for rejection of insurance claims
A policyholder should understand that insurance providers will not deny claims without any valid reasons. Very often, the mistakes of policyholders may cause the insurance provider to reject claims. Here are some common examples of claim rejection.
- The policyholder provides incorrect details and information
- While purchasing an insurance policy, you need to fill up all the details completely and appropriately. Every policyholder should do it themselves rather than relying on an insurance agent.
- Don’t conceal any pre-existing health conditions.
- Always be honest about yourself and your family member’s health history.
- Follow the claim process properly. Every insurance provider in India has its own set of guidelines for the claims processing settlement. The policyholder must abide by the process.
Now, you might have a sound knowledge of what is a term plan claim settlement ratio and its importance. Thus, it would be best if you choose an insurance company based on its claim settlement ratio so that your nominees won’t get harass during the claim settlement process.