- Date : 30/10/2021
- Read: 3 mins
Picking the ideal life insurance company can be tricky. This article will guide you through the top 5 companies with the highest claim settlement ratio
The importance of life insurance cannot be overstated. If you want to safeguard your family’s future, you need to think about getting a life insurance policy. Life insurance is essentially a contract between you and your insurer, wherein you pay regular premiums. Then, in the unfortunate event of your demise, your beneficiaries will receive a lump sum payout.
The insurance amount will act as a welcome safety net for your beneficiaries, who won’t have to face any financial hardships after you are gone. But how should you go about selecting a life insurance company? Let’s talk about the claim settlement ratio, one of the most important criteria to pay heed to while picking a life insurance company.
Claim settlement ratio decoded
Claim settlement ratio is the percentage of claims that a life insurance company settles, compared to the total number of claims it receives. It is calculated as a percentage using the following formula.
Claim settlement ratio = (Number of claims settled ÷ Total number of claims received) x 100
Claims could get rejected for multiple reasons such as impersonation, misrepresentation, fraud, etc. So, you should be extremely careful while filling out your application.
Why look for a high claim settlement ratio?
The claim settlement ratio of an insurance company shows the number of claims it accepts and rejects within a fiscal year. So, it is one of the best ways to rate an insurance provider. It is ideal to look for companies with a claim settlement ratio of over 95% since this indicates a higher chance that you will receive your claim without any hassle.
While the claim settlement ratio is often used to judge the quality of a life insurance company, it is not a good idea to base your decision solely on it. You should also consider other factors, such as plan coverage, service quality, policy benefits, etc.
So which are the top 5 life insurance companies with the best claim settlement ratio for the FY 2019-2020?
Here are the top 5 life insurance companies in India that boast a claim settlement ratio of over 95%:
- MAX Life: Max Life comes first on our list with a claim settlement ratio of 99.22%.
- HDFC Life: HDFC has an impressive claim settlement ratio of 99.07%.
- Tata AIA: Following close behind, Tata AIA boasts of a claim settlement ratio of 99.06%.
- Pramerica Life Insurance: While Pramerica Life Insurance had a significantly lower number of cases than the other companies on this list, it returned a claim settlement ratio of 98.42%.
- Canara HSBC OBC: The last one on our list, Canara HSBC OBC has a claim settlement ratio of 98.12%.
While the claim settlement ratio of a life insurance company allows you to gauge how many of its total claims a company settles, it should not be the only criteria for judging a provider. It could be possible that the company rejected claims because of genuine reasons.
While selecting a life insurance provider, we recommend checking out their benefit amounts as well. It will help you make an informed decision.