How to Check an Insurer’s Claim Settlement Ratio

Selecting a life insurance provider is a significant decision. You are, after all, leaving their hands your family's future. So, how can you be sure that an insurance provider is a good one? One of the best ways to know is to check their claim settlement ratio (CSR). Don't worry; it might sound like a complicated word, but we're going to explain it in the simplest possible way.

In this blog, you will know what is claim settlement ratio, why it's important, and how you can verify it before purchasing a policy. We will make everything very simple so that anyone of any age can understand.

First, What is a Claim Settlement Ratio?

Let's suppose: Someone purchases life insurance and unfortunately dies during the policy term. His/her family then claims to receive the money that the insurer has pledged. Now, the question of whether the money is paid or not depends on the insurance firm.

The claim settlement ratio (CSR) informs us about how efficient an insurer is at settling these claims.

It is expressed in terms of a percentage. For instance:

• If an insurance company had 1000 claims within one year and settled 980 of them, the CSR would be 98%.
• If it settled only 850, the CSR is 85%.

The higher the CSR, the more trustworthy the insurer and its quicker and fairer claims settling record.

Why is CSR Important for You?

When you purchase term life insurance, you want to ensure that your family is provided for in the event of your untimely death. Term life insurance is an affordable and straightforward plan that provides a substantial amount of money to your family upon your death within the policy term.

But that's where the rub is; this only benefits you if the claim is paid.

That's why looking at the claim settlement ratio before deciding on an insurance company is crucial. A good CSR implies that your family will receive the claim amount with minimal hassle and delay.

In short, term life insurance high CSR = peace of mind.

Step-by-Step: How to Check an Insurer's Claim Settlement Ratio

Now, let's go through how you can simply verify the CSR of any insurance company in India. You don't have to be skilled or even use any tools. Simply, follow these easy steps:

1. IRDAI Website

The IRDAI means Insurance Regulatory and Development Authority of India. This is the regulatory agency that oversees all insurance firms in India. Each year, they post a report that contains the claim settlement ratio of each insurer.

Here's how you can do it:

• Visit the IRDAI official website: www.irdai.gov.in
• Search for their Annual Report
• Download the latest report (normally listed by year)
• In the report, locate the section entitled "Life Insurance Claim Settlement Ratio"

This section indicates the CSR of all life insurance firms.

2. Check the Insurer's Own Website

The majority of insurers also display their claim settlement ratio on their official website. You can:

• Google company name "claim settlement ratio"
• Or check their homepage and find under sections such as "Performance", "Statistics", or "About Us"

Make sure to verify that the figure they display corresponds to the figure in the IRDAI report for the same year.

3. Verify on Reputable Financial Sites

Certain reputed financial sites such as:

• Policybazaar
• ET Money
• BankBazaar
• Mint or Moneycontrol

Also, give out CSR data annually based on the IRDAI report. These sites tend to break it up into easier-to-read formats, compare, and perceive. They might also provide charts, rankings, and analyst views.

4. Compare with Other Insurers

Just knowing one company’s CSR isn’t enough. It’s always better to compare a few insurers. For example:

• If Company A has a CSR of 98.7%
• And Company B has a CSR of 91.2%

It’s clear that Company A is doing better when it comes to settling claims.

But also remember, CSR is not the only thing to look at. We’ll talk more about that in a bit.

What is a Good Claim Settlement Ratio?

A satisfactory CSR is typically 95% or more.

Here's a quick guide:

• 98-100% – Excellent. Highly reliable.
• 95-97% – Good. Mostly dependable.
• 90-94% – Average. You might want to check closely.
• Below 90% – Be careful.

Many of the best Indian insurers tend to have CSRs over 98%.

Points to Remember

While CSR matters, here are some additional points you should keep in mind:

Number of Claims: CSR only speaks the percentage, but also sees how many total claims the company processed. 99% CSR with 50 claims is not the same as 99% with 10,000 claims.

Speed of Settlement: Also see how quickly the company pays out claims. Some companies pay out claims within 1-2 weeks, while others can take longer.

Claim Rejection Reasons: Research typical reasons why claims are denied. Businesses that deny claims for such minor things may not be the best.

Customer Service: Excellent service during the time of claim is a huge plus. Check online reviews from customers to assess how responsive and helpful the insurer is.

Conclusion:

Selecting the right insurance provider is equally crucial to selecting the correct insurance policy. You toil hard to pay premiums on your term life insurance. When the time arises, you want your family to collect the money stress-free and comfortably.

That's where the claim settlement ratio comes in. It's a straightforward yet effective tool to see if an insurer is reliable. Always pick insurers who have a high CSR, ideally over 95%. And don't forget, CSR is just half the story. Also, see their service, response time, and customer care before taking your final call.

Quick Recap:

• Claim Settlement Ratio (CSR) = % of claims settled by the insurer
• Verify it on IRDAI site, insurer site, or respectable finance websites
• 95% or more CSR = Genuine insurer
• Term life insurance is of use only if claims are settled, so always verify CSR
• Compare CSRs and make a wise choice for peace of mind