Insurance Claim Settlement Ratios for 2012-13-LIC up and Private insurers down
Few days back, IRDA, insurance regulator has published Insurance claim settlement ratio for 2012-13 year. There were some shocking things observed, especially about the data of private insurance companies. If you have taken term insurance plans or life insurance policies from private insurers, you should read this article. In this article, I would provide about Insurance claim settlement ratio for 2012-13, LIC vs top private insurance companies and how such info can change our decision to buy a life insurance plan.
Also Read: Best Term Insurance Plans in India
What is an Insurance Claim Settlement ratio?
Insurance claim settlement ratio are a number of policies an insurance company settled/approved over the total number of insurance claims received. E.g. if LIC has received 1,000 insurance claims in a year and it has approved/settled 950 claims and rejected 50 claims, 950 / 1000 = 95% are claiming settlement ratio. The higher the settlement ratio, the lower are rejections, hence it would be safe for an individual who is planning to take an insurance plan. It is immaterial whether insurance plan is for protection or protection cum savings plan.
What are Insurance Claim Settlement ratios for 2012-13?
- LIC – 97.73%
- Private Insurers – 88.65%
Details of some of the top private insurance companies
- ICICI Pru life – 96.29%
- HDFC Life – 95.76%
- SBI Life – 94.41%
- Max Life – 94.25%
- Kotak Life – 92.04%
For any other private insurance company, you can directly visit the insurance company website and search for claim settlement ratio.
Who is doing better and who is worst?
- LIC topped the claim settlement ratio, which has improved from 97.42% from the previous year to 97.73% for 2012-13 year.
- However, private insurers claim settlement ratio has reduced from 89.34% of the previous year to 88.65% by 2012-13.
- Some of the top private insurance players have good claim settlement ratio and they are ICICI Pru Life, HDFC Life, and SBI Life etc.
- However, smaller private insurance companies like AEGON Religare, Edelweiss Tokio Life, DLF Pramarica Life, Shriram Life etc. are among the lowest claim settlement ratio in 2012-13. Considering life insurance plans are high risk from such low claim settlement ratio insurers.
What do such companies say about low claim settlement ratio of 2012-13
Everyone has their own story. Out of 23 private insurance companies, only 5 insurance companies claim settlement ratio is above 90%. All others are below this rate, which is a major concern. Private insurance companies are showing some of the reasons given below for such low settlement ratio.
- Wrong information provided in an insurance proposal form
- Non disclosure of important facts
- Agents fill on behalf of insured thereby providing incomplete or wrong info.
What should you do now if you have purchased life insurance from such low settlement ratio insurance companies?
While I would not advise you to surrender the existing life insurance policies, you can consider some of the below tips:
- Read all the terms & conditions, disclosures carefully in your term insurance plan document received from your insurance company. In case of any material impact, reach out to the insurance company to modify and incorporate it appropriately. E.g. I have Asthma. I have ensured that such fact is disclosed and it appears in my final policy document received from the insurance company. Anything relating to your health, diseases, smoking, alcohol consumption, etc., should be disclosed and it should appear in your policy document.
- Revisit your insurance requirement and consider buying additional term insurance from companies like ICICI Pru Life (I-Care term insurance plan), HDFC Life (Click-2-protect the term insurance plan), Birla Sun Life (Term insurance plan) etc. I had LIC Term insurance plan. I wanted to buy additional term insurance and approached ICICI and HDFC Life. I had a little bad experience about reaching customer support at HDFC Life for more than 60 days, but I am not sure whether everyone is facing this problem. Recently, I purchased ICICI I-Care term insurance plan as an additional cover.
Also read: HDFC Guaranteed Pension Plan
Conclusion: Don’t just ignore such an important fact about the claim settlement ratio of your insurance company. You certainly need to take care of this as you have purchased such policy to protect your family in your absence. Taking small such care can help your family to have a peaceful life, even if you are not there.
Readers, have you experienced such situation where you purchased insurance plan and realised low claim settlement ratio? What have you done to over come this problem ?
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Insurance Claim Settlement Ratios for 2012-13
Sir, I am still confused that from which company term plan to buy? My budget to pay premium is max to 8000/year and I want the cover up to 80 years of my age. Edlewisstojio is one of the company offer my budget in Rs 7575/- but the CSR is only 45%. Please suggest me which company I prefer?
An article is being published on reliance online insurnace plan on Wed. Pls check this.
Which is better? Getting one term plan of Sum Assured of 1 Crore or 2 Term plan of sum assured of 50 Lacs each.
If I am in your place, I would go with second option Saurav.
I am planning to take term insurance policy. Presentely my age iks 34.
I am getting calls from Aegon Religare but due to CSR for this insurance company is very low, I do not want to go there?
please let me know my decision is correct or wrong. or suggest me some insurance company which are equivalent like as LIC.
There is no option for LUC
Please tell me wht is the edelweiss tokio life insurance cliam ratio????
Hi Vijaylaxmi, edelweiss tokio life insurance cliam ratio is 15.73% (2012-13). You should avoid such insurance companies from taking insurance policies
I am 35 and currently planning to but 2 Term Plans of 1 Cr each please suggest which will be the best option to go with and is it good to go for the riders that are given as option along with the policy.
Yes Pradeep, it is good to go with riders. Try SBI e-Shield term insurance plan or ICICI term insurance plan