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  • Claim Settlement Ratio For Life Insurance

    Life Insurance
    • Premiums as low as Rs.17/day for sum assured of Rs.1 crore*
    • Claim up to Rs. 1,50,000 deduction under section 80C**
    • Choose between annual and monthly premium payment options

    The IRDAI (Insurance Regulatory and Development Authority of India) publishes the claim settlement details of all the 24 life insurance companies in India on a yearly basis. The report includes the accurate figures and percentages of the number of claims made by policyholders, the number of claims that were settled, and the number of claims that were rejected.

    The claim settlement ratio is the ratio of the number of claims settled to the number of claims made.

    Claim settlement ratio = Number of claims settled/Number of claims made*100

    Claims may be rejected by life insurance companies for various reasons such as misrepresentation of facts, fraud, impersonation, etc. It is hence important to ensure that you provide accurate information to the insurer at the time of purchase.

    Claim settlement ratio for 2016-17

    The overall claim settlement ratio for the life insurance sector for the year 2016-17 is 97.74%. The ratio for the private life insurance sector alone is equal to 93.72%. The highest claim settlement ratio is of the public insurance company LIC at 98.31%. The report published by IRDAI also revealed that the total benefit amount for the year 2016-17 is Rs.13,850.62 crore.

    The table below presents the claim settlement data for individual death claims for the year 2016-17 in order of highest claim settlement ratio.

    Insurance Provider Number of claims made Number of claims settled Number of claims rejected Claim Settlement Ratio
    LIC 769386 756399 7432 98.31%
    Max Life Insurance 9821 9606 212 97.81%
    HDFC Standard Life Insurance 12724 12421 244 97.62%
    Aegon Religare Life Insurance 588 571 17 97.11%
    SBI Life Insurance 17610 17027 451 96.69%
    ICICI Prudential Life Insurance 10901 10539 305 96.68%
    Exide Life Insurance 2973 2866 107 96.40%
    Tata AIA Life Insurance 2707 2599 108 96.01%
    Canara HSBC Oriental Bank Of Commerce Life Insurance 653 620 32 94.95%
    Birla Sun Life Insurance 6048 5727 240 94.69%
    Reliance Life Insurance 11079 10473 529 94.53%
    Edelweiss Tokio Life Insurance 164 153 11 93.29%
    Bharti Axa Life Insurance 878 811 33 92.37%
    Bajaj Allianz Life Insurance 16329 14887 932 91.67%
    Kotak Mahindra Life Insurance 2831 2583 99 91.24%
    DHFL Pramerica Life Insurance 471 428 36 90.87%
    Aviva Life Insurance 1245 1128 110 90.60%
    IDBI Federal Life Insurance 1065 962 96 90.33%
    Sahara Life Insurance 725 654 45 90.21%
    Future Generali Life Insurance 1366 1223 126 89.53%
    PNB MetLife Insurance 3879 3380 357 87.14%
    Star Union Dai-Ichi Life Insurance 1473 1238 200 84.05%
    India First Life Insurance 1741 1439 273 82.65%
    Shri Ram Life Insurance 2926 1859 774 63.53%

    Points to note

    • The claim settlement ratio should not be the only factor to consider when choosing a life insurance company.
    • The ratio is a percentage in totality for all plan types - term plans, endowment plans, ULIPs, and so on. The report does not lay any specifications about the claim settlement for each of the plan types.
    • The ratio for each company may vary each year. Hence it may not be wise to choose a life insurance company solely because of the claim settlement ratio.
    • Individuals who wish to buy a life insurance policy should look at the features and benefits of the product as well as the kind of services provided by the company.
    • Though the claim settlement ratio is an important factor since it tells the common man about the number of claims that have been paid, section 45 of the Insurance Act protects the policyholder from being questioned by the insurer after completion of 2 policy years, unless the policyholder, at the time of inception, was aware that he/she is falsely representing facts.