Claim Settlement Ratio: The Most Important Factor to Keep in Mind When Buying a Term Insurance Plan

Jun 17, 2019 | 5 months ago | Read Time: 3 minutes | By iKnowledge Team

Claim Settlement Ratio - Aegon Life

If you want your family to have a peaceful and financially secure future, then getting a term insurance plan for yourself is a must. A term plan helps you and your loved ones be prepared for uncertainties of life and is one of the most cost-effective methods to mitigate risk. Term insurance has gained a lot of popularity in the past few years, largely because it offers higher coverage at low premiums. However, when choosing a term plan, it is a mistake to solely focus on paying the lowest possible premium. Instead, you should opt for a policy that really takes care of the financial requirements of your dependents as promised. The propensity of an insurer to honour its obligations when a claim is filed determines whether it is reliable enough to trust them for the well-being of your family.

This reliability is measured by the ‘claim settlement ratio’ and it is an important parameter to establish the integrity of your insurer. Therefore, it is one of the most crucial factors to keep in mind when choosing between various term plans. Here’s all that you need to know about claim settlements and the best practices to help you ascertain the most suitable policy for your needs:

What is the Claim Settlement Ratio?

Simply put, the claim settlement ratio is the number of insurance claims settled by an insurance company as a percentage of the total number of claims received over a period of time. In India, this ratio is calculated for each financial year and published by the Insurance Regulatory and Development Authority.

For 2017-18, our claim settlement ratio was 95.67%, which is 43 basis points higher than the average claim settlement ratio of all private insurers.[1] While the industry-wide data for 2018-19 is not available yet, our claim settlement ratio for the fiscal improved by 78 basis points from a year ago to 96.45%.  

Consistency of Claim Settlements

The consistency of an insurance company in settling claims over the years is also a good indicator of their dependability. Therefore, the historical claim settlement ratio of insurers over the past 3-4 years should be checked and it should be in a small range. For example, a company with the ratio in the range of 95% to 97% is more consistent than one with the claim settlement ratio in the range of 75% to 90%. In the last four years, our claim settlement ratio has been among the best in the industry.[2]

Financial Year

2018-19

2017-18

2016-17

2015-16

Claims Settlement Ratio By Volume

96.45%

95.67%

97.11%

95.31%

Ease of Processing Claims

In order to ensure that your family does not face any hassles or delays during the claim process, you must make sure that the whole procedure is as simple as possible. The claim reporting should be easily approachable for your dependents, with minimal turnaround time and quick claim settlement.

At Aegon Life, we value the security and emotions of your family and have made our claim process extremely simplified through a three-step mechanism:

  1. Your dependants or nominees can report claims online, at branches, central office, our helpline, SMS or email. Or, you can simply give us a call on our toll-free number: 1800-209-9090 and we will thoroughly explain the complete process.
  2. Your nominee submits the required documents for quick verification.
  3. Once all the relevant documents are received by us, we do the rest to assess and approve the claim as fast as possible. Moreover, with Aegon Life, claim settlements can be made through the National Electronic Fund Transfer (NEFT) system wherein the claim amount is directly credited to the beneficiary’s bank account.

Speed of Settling Claims

When buying term insurance, we do not want our family to keep waiting for the claim amount. A lower average claims processing time indicates that the life insurance company is not solely focused on getting sales but also ensures genuine service when it is needed the most.

Ability to Pay the Claim Amount

A good insurer strives to maintain its capital above the overall claim amount required and should be reflected by a very strong financial strength rating from the top-rated independent rating agencies.

The financial strength of our various operating units is rated at A+, i.e., the highest possible rating, by multiple rating agencies such as Fitch and S&P Global. [3]  

To sum up, instead of focusing on keeping your premium at the lowest possible, you must opt for an insurer with a reliable and customer-oriented claim settlement record.

Aegon Life Insurance Claim Process

Aegon Life - Claim Process


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