IRDA Claim Settlement Ratio 2012-2013-What it indicates?

IRDA recently (1st January 2014) released it’s Annual Report for 2012-13. This report indicates the overall Insurance Industry data. Here in this post I am only concentrating on IRDA Claim Settlement Ratio for 2012-13. This report is till 31st March 2013.

When anyone buying insurance product then their major concern is what was the claim settlement ratio of Insurance Company. It is just one indication about how the company is treating it’s customer. You must look into this data, because insurance is a long term contract between insurance company and insured. But do remember that this must not be the deciding factor while choosing your insurance plan.

In below report I tried to colour in three different categories. First colour (green) is for the companies whose claim settlement ratio stands more than 90%, second colour (yellow) for 90% to 80% and third colour (red) for companies whose claim settlement ratio stands below 80%.

I also tried to differentiate how fast they settled the claims. To identify this I divided the claims into three categories, first for less than 30 days, second for more than 31 to less than 90 days and finally claims settled after 90 days. This data indicates how fast is your insurance company when actually resolving the death claims.

Latest News (17th May 2014) !!!

LIC launched it’s first online term plan. Review will be available here “LIC’s online Term Plan e-Term-Review and Benefit

Source: IRDA Annual Report 2012-13

Source: IRDA Annual Report 2012-13 (www.basunivesh.com)

Also interesting point to note that from above 24 Life Insurance Companies 17 companies reported profits for year 2012-13. They are Aviva Life, Bajaj Allianz, Birla Sunlife, Canara HSBC, HDFC Standard, ICICI Prudential, IDBI Federal, ING Vysya, Kotak Mahindra, Max Life, PNB Metlife, Reliance Life, Sahara India, SBI Life, Shriram Life, Tata AIA and LIC.

Hope above points will be useful for you in deciding your buying of life insurance product. But I am once again stressing that one must not solely depend on Life Insurance company’s claim settlement ratio while buying.

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Comments

  1. Anshul Goyal says

    Hi
    I have a question regarding term insurance plan these all companies offer that whether this insurance is valid worldwide or applicable on unfortunate event happened in india only ?

  2. Amit says

    i’m 36 year old, planned and processed my application for term plan insurance , after medical test I found facts are not clearly mentioned in reports like I’m a diabetic and smoker. My diabetic issue not clearly mentioned in report which makes me worry as I want to give complete information about my health status. Agent insisting me to continue with same report and have policy, kindly suggest.

    Thanks,
    Amit

  3. Amit Chaulkar says

    Sir,

    Ive been planning to buy a Family Floater Health Insurance (2 adults + 2 childern) for 5.00 lacs

    Ive checked Apollo Muncih – Optima Restore & Religare care & HDFC Health Surakasha Silver
    I had almost made up my mind for Religare Care but claim settlement ratio of Religare is nothing to write about…

    Its a delimma….
    Can you suggest which of the above can be better???

    Amit Chaulkar

  4. Kaushal Karnad says

    Hi Basavaraj,
    Thank you very much for this blog & there by helping people with unbiased advise.
    Whenever I have interacted with policy bazaar folks, they say instead of a 1 or 2 Cr policy break it into smaller chunks of 50L or less, they say its gets passed easily.
    I don’t agree.
    Maybe the time taken may be slightly more but as long as data is same (which it will be) in both the cases, it should matter.

    Is this right? or its better to break a 2Cr policy into 4 pieces?

    Thanks in advance
    Kaushal

    • says

      Kaushal-They are forcing you to do such things to earn more. There is nothing like breaking will pass easily. When you buy first plan then you no need to worry. But for future buying you need to mention existing policies. So insurance companies will scrutinize that data. I think they will get more commission based on number of plans they sell. Stay away.

  5. mayur says

    hi Basavaraj,

    Really thanks for the information which you have provided.i am planning to buy a health insurance for my mom.after comparing benefits offering between bajaj hdfc and aegon religare. i was planning to buy aegon religare as they have some good benefits but after seeing claim settlement ratio of aegon religare i bit skeptical.

    please advice your views abouy aegon religare.

    br
    mayur sadaye

    • says

      Mayur-If the features and premium are matching then go ahead. But I am not sure about how they provide service (whether they are bajaj, HDFC or aegon). Because it depends on company. If you are declaring all facts properly and any future claim is within policy wordings then no one can deny it.

  6. sunny anand says

    hi sir.
    i am from pathankot, punjab. i am 28 years old and married.

    i want to take a term plan . i will disclose all the facts with best of my knowledge. kindly guide me to choose the the best online term plan between max life, icici life, sbi life and kotak life taking into account the premium and benifits and claim settlement ratio. i am searching for the term plan since two months. but i am still confused between above mentioned. please help me sir.

  7. Nirav says

    Is it advisable to take terms plan from 2 life insurance provider? i.e. 25lacs from each?

    Is this permissible for getting claim from both the companies? If the one company rejects the claim by any reasons even though all the information are furnished fairly, the other company may also reject on the same ground?

    Very confusing to choose the company who offers the best at a competitive premium?

    Please provide me to choose & move in right direction.

    Regards,

    • says

      Nirav-There are so many assumption like whether splitting is good or bad. But in my view better to stick to one company. Disclose all fact properly then no need to worry. Rejection of claim depends on so many things, which we or no one can say exactly. But what if the rejected company transfer the information to another company? So there are so many what, if, how. Instead stick to one company and buy it immediately. Recently I found comment on blog who says that he is searching for best term insurance sing once year :) So is it a right financial decision?

      • Nirav says

        Thanks for advice.

        One thing we know LIC is No.1 company for any plans but the premium is huge. What are the chances of other private insurance companies for getting bankrupt? At times, if we have opt for them & such company got closed, we will be at loss in case of term plans especially, as if you opt for another company at later stage, you may have to pay higher premiums as your age also is of concern.

        Please provide your view on above.

        Also, I have found interesting about Max life Term Insurance with monthly Income for 10 years. What is your feedback on the same?

        • says

          Nirav-LIC is number one in typical products but not in term insurance. So don’t be in wrong belief. Second thing, there is something called solvency ratio which all insurance companies keep it aside when they do new business. This is made mandatory to keep buyers safety. So if company goes bankrupt then from this amount regulator can pay. I am against maxlife offer. What if your family need immediate huge cash due to your liabilities?

          • Nirav says

            Let me know, which company Term Plan do you suggest, which has maximum inclusion like Earthquakes, Terrorist attacks, etc. Having maximum benefits & economical.

            Value for Money & gives us assurance of earliest claim settlement in case of all the correct information are provided & submitted on buying. I prefer the company with the Medical must.

            The companies must be transparent & should not have any hidden terms like ” Act of GOD” & so on.

            Please guide me to choose the correct plan.

  8. vikas says

    I have taken aviva term plan online 3 years ago.
    It’s premium was lowest
    Although I have disclosed all correct information.
    But little worried due low claim settlement ratio nd negative communication abt aviva from its competitors companies employee
    Is der any way to check authenticity of Aviva claim settlement process

    • says

      Vikas-Do you feel the above claim settlement ratio only depicts about term insurance? It is some % of total claim settlement ratio. So we can’t know which is best insurance company in settling your term insurance. If you declared everything properly then no need to worry. Regarding Aviva competitors, which competitor in the world say that his/her competitor is good, whether it is insurance or in any industry?? So don’t bother and stick your principle.

  9. Sanjay M says

    Sir,
    i am 45 years old and i purchase a term plan of Rs. 50 lac from AEGON Religare I Term as they provide cover up t0 75 years. please advice me is it a good choice.

  10. Gaurav says

    Hi Basavraj,
    I am planning to buy Aviva ilife policy

    Cover – 1 cr
    Premium – Rs 10900 (They increase the premium from 8700 to this amount citing family medical history – my parent are diabetic and high BP)

    My medical is done. The reports were normal. Since they increased the annual premium by 2200 citing family medical history, I am in doubt now.

    DO you think it is a good choice?

    Regards
    Gaurav Singla

  11. Vishal Srivastava says

    Hi Mr. Basavaraj,

    Thanks for this excellent piece of information.

    I am 28 years old married man with annual package of 7.5 lacs. I am planning to take a term insurance of 1 crore and I have been a smoker earlier, but not doing it since last 1 year (that doesn’t matters now).

    I have gone through the following companies with their annual premium as follows –

    1. MAX – 35 years – 12472 Rs.
    2. ICICI – 30 years – 14756 Rs.
    3. HDFC – 30 years – 16405 Rs.
    4. SBI – 30 years – 20551 Rs.
    5. LIC – 35 years – 24270 Rs.

    Like many others, I also talked to http://www.policybazaar.com guys and asked them between MAX LIFE and SBI, and they were pushing me for MAX LIFE. They look somewhat fishy to me.

    I am really very much confused between the two and recently I also saw ICICI and then your current post of claim settlement ratio. I was hesitant to choose MAX LIFE due to lot of fraud reports by users on various blog sites.

    Of course LIC is being too high premium for me.

    Please guide me to take the right term insurance among these 5. I will furnish all information correctly.

    Is it advisable to choose MAX LIFE (as they are also giving 6% extra in case they are not able to settle the claim in 10 days). SBI is offering to add upto 5 nominees (and I can also add my parents into it).

    Your quick response will help me to take a plan immediately as I have been postponing it since last two years and do not want to delay it any further. Please help me sir.

    • says

      Vishal-You can choose MAX. Because there are so many reasons for claim rejection. So whatever there in comments on few blogs may or may not apply to you. Hence my suggestion is to disclose all facts at your end correctly and go ahead. If at all too concerned then the choice is between HDFC or ICICI.

      • Vishal Srivastava says

        Hi Mr. Basavaraj,

        My only concern with MAX was due to reliability of the company as well. MAX already has claim settlement ratio of above 90 %, but also the number of claims are very less when compared to ICICI or SBI or even HDFC as well. Going with ICICI was like giving only 6k+ extra for 30 years. The main factor with MAX was they are offering 35 years for the term.

        When I went to their office, MAX LIFE manager was luring me to take policy from them rather than online, but he was not able to answer properly that what is the problem with buying it online. This is where it gives a fraud kind of feeling.

        Thanks for your previous quick reply Sir.

        • ICICI Prudential Life Insurance says

          Dear Mr. Srivastava,

          As suggested by Mr. Tongatti, to secure yourself you may consider ICICI Pru iCare II.

          Here are a few points to help you make an informed decision:

          1. ICICI Prudential Life Insurance has one of the best claims settlement ratio in the industry at 96.29%*.
          2. Plus we are also one of the fastest in claim settlement and clear more than 90%* claims within a month.
          * As per IRDA’s Annual Report for FY12-13.

          To know more about our online term plan visit: http://bit.ly/17uqPjV

          Please understand that we only offer suggestions based on your requirements, however choosing a policy most appropriate for you remains at your discretion.

          Regards,
          http://www.iciciprulife.com

        • says

          Vishal-Do you feel LIC’s claim settlement ratio is high means they are settling big claim amount? You are at wrong side. They have average settlement less than Rs.1,00,000. So this claim settlement is only indicative but not full part. Because as of now we don’t have data which can prove that who are the leaders in settling pure term insurance claims. Regarding MaxLife manager experience, it will be same will insurance companies. So don’t bother about those things. Instead stick to your requirement and buy it.

  12. Jayendra says

    Really great effort to educate newcomers about the Insurance industry. Keep up the good work.
    One request: Please share data on choice of citizens of companies offering ‘Term Insurance”, percentages also help ! This helps us determine which term insurance policies are more popular.

  13. praveen pathak says

    Sir, my father is seeking to buy a health insurance plan, he is 50 yrs old, and diabetic patient, please help me out for a right health insurance policy. I have tried to study a number of policies but all the things is complex..

  14. babbu says

    Hello…i m an NRI buying hdfc life term plan…as i have many other international insurance companpies..but i prefered indian company.pla advice is hdfc is good ?
    Thanks

  15. says

    hi sir,
    i have read all of your comments regarding the term policies and many thanks to you that i have finally decided how to go with it. sir, i just wanted to ask you that, i want to buy a term plan for me and had an discussion with an agent regarding this. they are saying that if i purchase a term policy online then i have to run from pillar to post to submit different documents/ blood reports/ etc to the company and i wont be getting the HIGH SUM ASSURED DISCOUNT BUT, if i purchase the same with their help then they will take care of it all AND THEY WILL ALSO HELP GET ME DISCOUNT.
    sir, please help me with this…

    thanks..

    • says

      Vinet-It is just one more type of sale gimmick they are playing with you. There is no such thing that you need run from pillar to post to submit documents. Also all blood reports or medical reports will be directly sent from hospital to insurance companies. So why you need to submit? Regarding higher sum assured discount, let us say they are giving you around Rs.2,000 as discount, but what about the premium you are paying around 30% to 35% higher than online premium? It is completely a false statement what your agent is providing you to pitch his sale. Rest is left with you.

  16. Vinay says

    Hi sir,

    I am planning to buy one term insurance, but very confused about which one i should choose.
    I am thinking about Max life Online Term plan. Can you suggess me the best.

    Thanks & Regards
    Vinay

      • ICICI Prudential Life Insurance says

        Dear Vinay,

        As suggested by Mr. Tongatti, to secure your family you may consider ICICI Pru iCare II.

        Here are a few points to help you make an informed decision:

        1. ICICI Prudential Life Insurance has one of the best claims settlement ratio in the industry at 96.29%*.
        2. Plus we are also one of the fastest in claim settlement and clear more than 90%* claims within a month.
        * As per IRDA’s Annual Report for FY12-13.

        To know more about our online term plan visit: http://bit.ly/17uqPjV

        Please understand that we only offer suggestions based on your requirements, however choosing a policy most appropriate for you remains at your discretion.

        Regards,
        http://www.iciciprulife.com

  17. pradeep says

    Hello Sir,

    I understand that the table abaove shows the claims ratio for Individual death claims. Is it possible to also see the claims paid out for pure-term insurance policies ?

  18. DhakshinaMoorthy says

    I thank you for your very useful post.
    My age is 27. I planned to purchase health insurance (Family Floater) for my family.
    Please suggest which health insurance company provide best claim settlement.
    Please advise.

  19. RAJ SRIVASTAVA says

    Dear Sir,

    What about the term insurance of Reliance Life? I found it cheapest but what about its claim settlement ratio? It it worth to buy it online?

  20. bsr says

    sir, my age is 36 now, i want to purchase a good term policy for the period of maximum extended with critical illness and awaiver of preium for 50 laklhs

  21. ROHIT GUPTA says

    Hello Sir,

    I am 24 years old. I am looking for a Term insurance Plan and Health Plan. For which company i should go taking into consideration premium amount and claim settlement ratio.

  22. ashok kumar says

    Hello Sir,

    I am 32 years old and taken Aegon religare online term plan for 7500000 premium @ 11400.Should I continue or change.
    Please do suggest.

  23. Raj says

    Dear basavraj,

    i really appreciate you to spread knowledge in investor and insurer .
    i also plant to take term plan of 50 lack and investment of 50K yearly
    for 20 to 30 year and mediclaimed also please suggest company for above these 3 and
    is there ok with other than LIC company’s for term plan and investment.

    Thanks in advance for your great Opinion.

    Regards
    raj

  24. Vamsi says

    Hi Basavaraj

    I have very similar query posted by Sachin Samuel.

    Even PolicyBazar proposed me same combination , the confusion is about Settlement ration do we take a chance with less premium Term covers or is it better to go with HDFC/Max/LIC which have better settlement ratios.

    I am sure i have declared 100% facts.

    Whether settlement depends up on the company profile or the facts i have disclosed.
    Honestly i dont want to take a chance , but i want to believe some one i can rely.
    What is your suggestion ?

    Thanks for the work
    Vamsi

    • says

      Vamsi-Never believe on Policybazaar, even though they are claiming just comparative site, but still they lure buyers to buy particular company online term plans. Without having any benefit why they will force you by calling so many times to buy ONLINE TERM PLANS? So what it indicates is, don’t go only based on price of policy. Instead go with the company track record and how they are efficient in handling claims etc. It is purely the judgement of claim settlement team to decide based on the facts you disclose and the reasons for death. Hence we can’t say it depends on company or your disclosure. But the only thing that is in your hand is, choose the company based on their past record, performance, price (one of the condition, but not the major) and disclose your facts without hiding anything. This is what you and me can do. Even me too don’t want to take change especially when it comes to life insurance. But if we are at right path then I don’t think no one can deny. Hoping for the best and regulator.

  25. Ram Borase says

    Hello Sir,

    First of all Thank you so much for proving detailed information!

    I have few quires as mentioned below:

    1. As you suggested to Mr. Parag JOSHI bying Max Life, HDFC or ICICI
    2. If, I purchased term plan from one of these options for 50 Lakhs, is it required to adding riders for critical illness?
    If you answering YES! then which insurance company provide best options for this.
    3. OR else any options for separately buying critical illness factor .

    Thanks in advance!
    Ram BORASE

    • says

      Ram-Riders are additional features to your main plan. So it is your choice to choose riders. In my view if term plan offers it then go ahead. But best option is to buy it separately from general insurers.

  26. Sachin Samuel says

    Hi Basavaraj,

    Brilliant article! Appreciate your work.

    I have few questions.

    1. I am 33 years old and looking for term insurance. When I called policybazar, they recommended to break the cover amount and get 2 term insurance instead of one, so that incase one of the insurance company rejects claims, my family will still have chance with the second company.

    Do you think this is a good idea?

    2. I was planning to go with Aviva and Aegon religare, 50 lakh each. Do you think it is good idea? if not can you recommend which one should I choose?

    Once again, thanks for the excellent information and thanks in advance for answering my queries.

    Regards
    Sachin

    • says

      Sachin-1) It is good to break. Have you thought that what will be guarantee in future that one insurance company will not pass the information to another by stating the reasons behind claim rejection? Hence disclose all facts correctly and buy one product.
      2) Better to go with HDFC, ICICI, Max Life, SBI or LIC (costliest).

  27. PARAG says

    Hello Sir / Madam

    I am Parag Joshi, My Date of Birth is 08-07-1981, Annual Income is Rs. 10 Lakhs.

    Planing to buy NEW TERM policy of Rs. 01 crore.

    I have seen several insurance company term plan & premium are as below :

    LIC – 35,000/-
    AVIVA I LIFE – 9000/-
    MAX LIFE – 10,000/-
    HDFC CLICK2PROTECT – 13,800/-

    VERY MUCH CONFUSE WHICH COMPANY TERM PLAN TO BUY ? EVERY AGENT SAYS ABOUT THEIR OWN COMPANY.

    AFTER PAYING SUCH PREMIUMS IF OUR FAMILY WILL NOT GET ASSURANCE ? CLAIM SETTLEMENT RATIO DOSENT MATTER ?

    PLS. ADVICE. VERY SERIOUS & CONFUSE ???

    Thanks & Advice which is good over all. . .

    PARAG JOSHI, MUMBAI
    Call Me on – 9324239400

  28. Teja says

    Wonderful and the most important info required for any person who wants to select their insurer. Unfortunately, most people aren’t aware of this. This is the list which separates the market lions from the rest. LIC leads as usual and no surprises for this. Basu, thanks for sharing this.

  29. Sushila says

    A great article, very helpful for the investor community. specially when the insurers are luring the investors based on this criteria.
    I also read that one should ask the agents for the break of claims ratio into;
    Maturity Claim
    Quick Claim
    Surrender Claim
    Settlement Claim
    Would appreciate some info on the above and how this should affect an investors decision making.

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