Term Insurance Claim Settlement Ratio IRDA 2016-2017

Term 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 2016 stats, we have provided below the complete list of Claim Settlement Ratio for various Life Insurance companies in India.

Who releases Data on Term Insurance Claim Settlement Ratio

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.

Who 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.

Companies with older base is more likely to have higher clam settlement ratio then newer ones.

Reason being the Insurance claim within first 2-3 years are more prone to concealing of facts by the customer. Check Claim settlement ratio for this year 2013-14 in this link.

Term Insurance Claim Settlement Ratio 2016

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.

lic has the best life insurance claim settlement ratio in india

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.

Conclusion : Term Insurance Claim Settlement Ratio

We cannot blame a company for low Settlement Ratio for Term Life Insurance claims. however, companies cannot ignore this Ratio as customers do see it before buying an life insurance policy.