Every single person must have an insurance plan for a financially secured future. You must think about your family’s protection, and for that purpose, an insurance plan could be the right option. There are different types of insurance plans you can choose from, but most importantly, you should always consider the benefits and features that it provides.
Although, one of the most essential things you must look for is the claim settlement ratio. Apart from this, there are also certain factors like age, income, health, and liability to check upon before buying an insurance plan.
In this article, we will discuss the importance of the claim settlement ratio before buying an insurance plan.
What is a claim settlement ratio?
The total number of claims passed in a year by an insurance company is referred to as claim settlement ratio or claim paid ratio. The ratio will let you know about the total claims that have been settled by the company over the claims received during a year. Also, it helps in determining the reliability and consistency of the insurance provider.
Moreover, if you are planning to buy a savings, health plan, or ULIPs, then you must always consider their claim settlement ratio. The claim settlement ratio can also define the company’s reliability in terms of the death claims that they settle. Also, it has higher importance since it can be very beneficial for overcoming tough times.
Which Term to Buy?
You are advised to purchase a term plan from a company that offers a high claim settlement ratio. For the life insurance companies operating in India, The IRDA publishes a death claim settlement ratio report every year that provides a good measure of the quantum of claims getting cleared against total claims that are filed every year.
A term plan works in a way that it offers a sum assured or a fixed amount of money to the beneficiaries of the insured within the policy period in case of death of the insured.
Is the claim settlement ratio the most important factor for an insurance plan?
Well, it is quite obvious that a claim settlement ratio is a key to finding the right insurance plan. For instance, if you are willing to buy a term insurance policy, then you should never avoid considering the claim settlement ratio. However, it is very crucial to check up on the claim paid ratio of the company as it is the major principal factor.
It is said that an insurance company with a claim settlement ratio up to 90-96% is considered to be more reliable than a company with up to 75-93% CSR.
We usually buy an insurance plan without considering the major aspects like the claim settlement ratio; this could be a huge problem for your beneficiaries who are completely dependent on the plan.
Therefore, you must always look for the company’s claim settlement ratio from which you are buying your policy.