MintWise · January 3, 2014
If you are looking for a term insurance plan, you MUST know the IRDA claims settlement ratio before deciding which company you want to go in for. But even before that, you need to know how claims settlement ratio is calculated. Click here to find out. If you already know how, read on.
The latest figures for 2012-2013 were released recently by IRDA on Jan 1, 2014. These figures will remain very relevant until Dec 2014, which is when the ratios for 2013-2014 will be announced.
In its latest Annual Report, IRDA in addition to Claims Settlement Ratio, has given details of two other very important metrics. So now you can find out not just whether your claim is likely to be settled or not, but also how efficient the settlement process can be expected to be. This is really laudable and shows that the IRDA is really ensuring that life insurance customers get all the relevant information to take the right decision.
- Claims Servicing Speed : The efficiency of the insurance companies for servicing your claim.
- Claims Process Efficiency : Percentage of claims pending where the company is yet to take a decision on the claim and the nominees are waiting for the claims amount. Lesser this number, better is the claims process efficiency of the company.
Firstly, let us look at Claims Settlement Ratio 2012-2013.
There are 6 companies which have claims settlement ratio > 90%.
But have these companies had a >90% claims settlement ratio only this year? Or have they been consistently >90% in earlier years also? I’ve put together the last four years trend to give you a better idea.
You will notice that some companies have been consistently in the >90% mark, which is fantastic! I would definitely prefer a company that has been consistently delivering its promise to a larger % of its policyholders.
Let’s now evaluate based on the next parameter, Claims Process Efficiency for 2012-2013. It is measured as percentage of claims pending where the company is yet to take a decision on the claim and the nominees are still waiting for the claims amount. Lesser this number, better is the claims settlement process efficiency of the company.
You will notice some companies have < 1% of claims pending, and that too in spite of receiving a large number of claims in the year. That is remarkable since every claim is a unique case and settling > 99% claims is indeed a sign of an efficient insurance company – this increases our trust in the insurance company. When I buy a term insurance plan, I will see this figure along with consistency of Claims Settlement Ratio because together they will show the company’s philosophy towards claims.
Next we evaluate the companies based on the final parameter – Settlement Process Speed. Any claim should generally be paid to the nominee within 30 days of receiving all the requirements asked for. Let us see what percentage of claims received by the company are actually processed in <30 days.
Again, you will see that 3 companies have settled more than 90% of claims within 30 days, in spite of number of claims being large. So our family members (nominees of our term insurance policy) will not have to keep chasing with the company to get the claim amount. Very good indeed.
Source : http://goo.gl/E1rFYW