Check out claim settlement ratio before taking life insurance

When taking a life insurance policy, look at the claim settlement record of the company concerned. Insurers need to inform their claim settlement details to IRDAI (Insurance Regulatory and Development Authority of India (IRDAI). Check out how to select the right company that won't let down family members.

Hyderabad: These days, competition is growing in every sector. Insurance companies are coming out with more and more term policies. Life insurance stands as a reliable financial support for your family in unforeseen situations. Term policies offer more protection with lower premiums. It is just as important to choose the right insurance company as it is to take a policy that suits our needs.

We must take a close look at the claim processing record of the company concerned. It is better to avoid the insurers who create hassles in giving compensation when anything happens to the policyholder. Terms, applicability and exclusions of term policies vary from company to company. Apart from looking at all these things while buying a policy, you must also look at the company's payment history.

Claim settlement ratio

Claim settlement ratio is a measure of how many claims a particular many has settled during a given period. In case of death of the policyholder, the nominee approaches the insurance company and claims the policy. The insurance company accepts or rejects the claim as per the rules. If you take a policy from a company with a good settlement ratio, the chances of getting rejected are less.

Low ratio

A company with a low ratio may pose difficulties in giving compensation. For example, a company receives 100 claims in a year. If compensation is given to 90 policies without any problem, the ratio of payments is calculated to be 90 percent. In an attempt to attract policyholders, insurance companies are making these policies available online at lower premiums. It is never advisable to take policies just because the premium is low. A term policy is one of the biggest financial decisions in life. So, choose a policy only after thorough research.

IRDAI

As per the rules of the Insurance Regulatory and Development Authority of India (IRDAI), every insurance company discloses their claim settlement details from time to time. A look at these reports will reveal this ratio. Take as much information as necessary and try to take the policy with proper understanding. We also understand some information in the advertisements given by the insurance company. Do not rely entirely on this and seek expert advice if necessary. Contact the insurance company's service center or branches for complete details.

Policy benefits

The ratio of claim payments should be checked for policies pertaining to endowment, money back, ULIP (unit linked insurance plan) etc. Only then we will be able to get an estimate on the track record of the insurers. All this is necessary to choose the right company. Always remember that the annuity, liability, ability to pay premium and benefits provided by the policy are important factors in choosing term policies.

Zero secrecy

While taking the policy, inform the insurance company about your health and financial details without any secrecy. Details of existing policies should also be mentioned. Then there will be no problem in the policy claim.