IRDA published its annual report on 4th January 2018. Let us see the IRDA Claim Settlement Ratio 2016-17 and also which is the Best Life Insurance Company in 2018.
Note:-I published the health insurance data also. Please refer “IRDA Incurred Claim Ratio 2016-17 | Best Health Insurance Company in 2018“.
Claim Settlement Ratio is the indicator how much death claims Life Insurance Company settled in any financial year. It is calculated as the total number of claims received against the total number of claims settled. Let us say, Life Insurance Company received 100 claims and among that it settled 98, then claim settlement ratio is said to be 98%. Remaining 2% claims the Life Insurance Company rejected.
Based on this, we can easily assume how much customer friendly they are in dealing with death claims. However, I warn you that this claim settlement ratio is raw data.
It will not give you a clear picture of what types of products they settled. They may be Endowment plans, ULIPs or Term Insurance Plans. Hence, this is not a sole criterion in judging the performance of a life insurance company.
Below is the IRDA Claim Settlement Ratio 2016-17 or up to 31st March, 2017. I differentiated the below table with colour code for your better understanding.
The same one I tried to show in a bar chart for your easy understanding. Here also I used the colour code and they are as below.
Green-Claim Settlement Ratio from 95% to 100%
Yellow-Claim Settlement Ratio from 90% below 95%%
Red-Claims below 90%.
You notice that among total 24 Life Insurance Companies, around 8 companies are in GREEN (Claim Settlement Ratio above 95%). Total 11 companies are in YELLOW (Claim Settlement ratio between 90% to 95%). Total 5 companies are in RED (Claim Settlement Ratio below 90%).
As usual, LIC tops the list. But don’t feel happy. Let us see the claim amount settled by individual companies to arrive at best companies.
As I said above, the claim settlement ratio will not give you the clear picture about which type of products the insurance companies settled. However, we can assume the types of products they settled by looking at the average claim settlement amount of Life Insurance Companies in 2016-17.
Here come the results !! LIC stands in lowest with red in colour along with Life Insurance Companies like Sahara, Reliance Life, Exide and Future Generali. What is it indicating?
It shows that, even though LIC settled the highest number of claims, the majority of such claims are less than Rs.2,00,000 Sum Assured. Hence, it is indicating indirectly that LIC’s claim settlement is mainly in the category of Endowment Plans but not Term Insurance.
Now let us go deeper into IRDA Claim Settlement Ratio 2016-17 and try to analyze the how much amount of claims they rejected. Here, I calculated average amount as I don’t have data to check the maximum and minimum amount.
The results are as below.
You notice that Sahara’s claim rejection amount is less and then comes the LIC. LIC’s claim rejection is less because the quantum of claims it handles is HIGH but value is less. So no need to say that LIC done a great job here.
The greatest fear for all of us is how fastly the Life Insurance Companies settle the claims. Let us now analyze the data of claims pending with Life Insurance Companies in 2016-17 and how old they are.
You notice that Future Genereli, SBI Life, Shriram and LIC are leading in pending the claims for more than a year. Reasons may be unknown to us.
Based on the IRDA Claim Settlement Ratio 2016-17, which are the Top and Best Life Insurance Company in 2018? I select only five based on above data. You may differ in my view and come up with a different set of ideas. But these are my choices.
# Claim Settlement Ratio is raw data
As I pointed above, claim settlement ratio is just a raw data. It will not give us the specific data. Hence, never rely on this single data alone while shortlisting the insurance company.
# Concentrate on Product rather than company
Choose the product which suits your requirement and premium affordability. Declare the facts properly. Never hide any material facts. If all these you do, then an insurance company will have to accept your claim. Never give a room of suspicious on you to reject the claim.
# Section 45 of Insurance Act will guard YOU
According to Section 45 of Insurance Act “No policy of life insurance shall be called in question on any ground whatsoever after the expiry of three years from the date of the policy, i.e. from the date of issuance of the policy or the date of commencement of risk or the date of revival of the policy or the date of the rider to the policy, whichever is later”.
It says a lot. Even if you shared wrong information or hid some material facts, then also it is purely life insurance Company’s responsibility to dig deep and find out faults WITHIN 3 YEARS ONLY. After 3 years, they cannot question. Note the period of 3 years, it is from the date of issuance of the policy, or the date of commencement of risk or the date of revival of the policy or the date of a rider to the policy, WHICHEVER IS LATER. So let us say if you took the policy today and after a few years, the policy lapsed due to non-payment of premium. However, you thought to renew it again and paid all dues. In such situation, this 3-year period starts from such revival date, but not from the original policy issued date.
Read the complete details about this IMPORTANT act of Life Insurance in my earlier post at “Term Insurance-Claim Settlement Ratio no more a big criteria”.
# Disclose the facts Properly
While buying Life Insurance products, you must fill the proposal form on your own. Never allow any agent or Life Insurance Company representative to fill it. Disclose the facts properly without hiding anything. This will really help you in a big way. Also, it will not give any room for insurers to reject your claim.
Do the things properly which are in your hand. Rest HOPE for the best 🙂
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Hi Basavaraj,
Could you please guide me on this.
***Fight against HDFC LIFE INSURANCE COMPANY*** HALLA BOL
Hi Team,
I have HDFC life term insurance policy to cover my home loan where critical illness is covered. I had major heart attack with 100% blockage on right artery on 29th October 2018 so gone through angioplasty. So i have submitted my critical illness claim to HDFC life insurance company in the month of December 2018.
I refute HDFC life statement that i had diabetes at the time of issuing me a policy so they have rejected my critical illness claim which has no grounds at all. No one has conducted my any medical tests from HDFC life before issuing me a policy then how they can say i had diabetes. My two other insurance companies i.e. Aegon Life and PNB metlife have taken all my tests before issuing me policy and now both have approved my critical illness claim within a month without any issue.
Now I am totally frustrated with this type of service from HDFC life,as i am a classic customer of HDFC Bank from last 15 years and they are giving me such service.I am a corporate employee with more than 3 lacs of employees in our company, so that i can spread this on our social forum. Social media is too powerful so they may definitely loose their business and eventually people will loose faith on HDFC life.I am not able to concentrate my job due to this issue also i am getting mental harassment due to this. I have already shared this on Facebook, Twitter, Linkedin, Instagram and Whattsapp.
Furthermore, I have already enclose a claim approval letters from Aegon Life and PNB Metlife to HDFC life for reference.
Notwithstanding that i have already submitted all the required evidences, it has now been 4-5 months since i raised my claim. This delay is unreasonable and it appears that we have now reached a deadlock. I have done all that i can do advance my claim but they have failed to deal with it adequately. My claim is dully covered by the policy and if i do not hear from HDFC bank within a week time then i may refer the matter to the financial ombudsman service without any further warning.
I looking for compensation as well as my critical illness claim approval.
My humble request you to look into the matter and do needfully in this on priority.
Thank you for your anticipated cooperation in this matter.
Please find my below details. Also sent legal notice of 1 CR for mental harrassement.
Loan Account. 402HPV57599009
Member Code / Master policy Number. PP000247
Consumer Court complaint No.0108155/2019
IRDAI complaint No.03-19-014947
Regards
Vikas Nhavkar
Dear Vikas,
The biggest MYTH with many of us is that we consider as if the ESTEEMED customer for Life Insurance company also if we have an account with their subsidiary bank. Do remember one thing that HDFC Bank is a different entity than the HDFC Life. Now coming back to the claim rejection, you have already raised an issue with IRDA. Better to wait for their process.
Dear Basavaraj, There is no response from IRDA and consumer court, they are saying file a police complaint against HDFC Life, I have already sent them legal notice of mental harassment even they are not replying to legal notice as well. Now i have raised my concern with Ombudsman team to proceed further.
Dear Vikas,
The best way is Ombudsman but not IRDA. If Ombudsman also not help you then drag them to the court.
Dear Basavraj,
Based on online research I am confused between TATA AIA and MAXLife for taking term-plan for 1 Cr.
I prefer TATA & AIA (100 yrs history)considering the brand name.
But TATA AIA claim settlement period is very high (one of the highest) in the above data on this site which bother me.
MAX has very good settlement period and is a decent brand too
Pls. suggest. what to chose.
Dear Niket,
Refer my latest post "IRDA Claim Settlement Ratio 2017-18| Best Life Insurance Company in 2019".
I am 48, M, tee-totaller, Diabetic for 10 years. Looking for a Term Plan (online or offline) for 50 L or 1 Cr. Max. age coverage of atleast 80 or even 85 years. Let me know the best plan, potential risk, mitigation, claim ratio (online and offline), assured claim in case of any event.
Dear Shyam,
You are looking all benefits in a single plan. Do remember that they are into business but not for social cause. They first cross check your health issues and income. Based on that they issue the policy. Refer the above post properly and knock the doors of the insurer. By the way, do you need Life Insurance beyond your retirement age?
My age is 33 & I want to take a term plan for secure life. I have a medical history of angioplasty & already max life & icici decline my application for same reason.
Plz suggest me any insurance company with this medical history issue the policy?
Hi Amit, I have also gone through Angioplasty, so i inquired we will have to wait for 3 years to buy new policy.
Dear Amit,
Hard to say who will accept. Try your luck based on your comfort with companies.
Hi,
ICICI term plan is providing an option to complete premium within 5 years for a plan of 38 years. For payment tenure of 40 years, it costs Rs.7972/year. It costs Rs.30,924/year if paid payment tenure of 5 years.
If calculated this gives around 50% savings in premium for same benefits.
What is your advise on opting for short payment tenure ?
Dear Vikram,
If you can afford the premium, then go ahead.
Dear Sir,
I am planning to buy online term plan of 50L and upto 75 years.
also want waive of premium rider into my term plan.
I am confused between Aegon Life (6574/-INR Premium) Vs Edelweiss Tokio (7029/-INR Premium) Vs Max Life (7508/-INR Premium).
Please suggest which one is better ?
Thanks
Dear Hiral,
All are equally good and bad. Choose the one which is best suitable to you (comfort).
Dear Sir,
My name is Naman Vashishth. Age : 27 Year. Annual Income : 5 lakh Unmarried. I want to buy term plan of 1 Cr. which can give me cover upto 70 year. Which company do you suggest for me.
Dear Naman,
My suggestions are already listed in above post.
Very helpful article indeed. 1. Is it wise to buy Life cover with ADB rider and critical illness rider or would it be better to buy it seperately.
2. I am planning to buy Icici i protect with both these riders..however i have an option to buy TATA AIA critical plan separately.
Note: in life cover will stand reduced to the extent of CI payout with reduced premium thereafter.
What should i opt for?
Thank you.
Dear Tejas,
1) Buy them separately.
Thank you Sirji. Would be grateful if u can clear one doubt.
My Age is 45.
Can i take 3 policies as under:
1) 1.0 cr SA life cover of ICICI (40 yr) with 25L critical cover (30 yr). (34 Illness cover) and 100% ADB.
2) 1.0 Cr SA basic life cover of Tata AIA (35 yrs)
3) 25 L Critical Cover (15 illness 30 Yrs).
REASON being: Only ICICI offers 34 illness along wIth ADB cover. Premium for 1 cr SA of TATA is lesser. And hence the combo.
My worry being: would both Icici and Tata will pay on diagnosis of critical illness? Any issues I might face at the time of claims if i take such a combination?
Would really be thankful if you can guide me on this.
Best regds
Tejas
Dear Tejas,
What is the reason of combining Life with Critical Insurance?
Icici covers more than 25 lacs of critical cover only if its a part of a term plan. In a standalone plan their limit is 25 lacs.
But i get your point... I should rather take 25 Lac of Critical cover from Icici and Tata each separately...and the term plan separately. Got this. But would both companies honour my Critical care claim at the same time or can that be a problem. If it can be a issue wouldnt i be safe taking 50 L critical with icici term plan with 34 illness cover?
Dear Tejas,
Treat the claim separately for Life and Critical Insurance. Who honor or who not, depends on many things. Do you think there is any GUARANTEE of honoring your claim if you took both with same insurer? Why I am saying for separate is that standalone critical cover always gives you exhaustive features which is not possible with riders (because they come with so many limitations).
You are so right. Thank you for your support on this matter. Though Hdfc has a rider which waives of Entire premiu upon diagnosis of any of 34 illness BUT Will go for it seperately. Really appreciate your feedback.
sir namaskara iam subrahmanya frm kundapura my age 45 i confused in lic term insurence and private term insurence pls advise me i for term insurenes private or govt pls
Dear Subramanya,
You can buy either from LIC or from Private insurers. Both are equally good and bad. Don't do so much research.
Dear sir,
Your articles are most informative. Please continue.
Kotak life is claiming that their claim settlement ratio is 99.4 %. Is it correct?
Dear Sivaji,
Please cross check the same either with my data or IRDA's Annual Report.