What is Term Insurance Claim Settlement Ratio and Why is it Important?
One of the most important factors people should consider before purchasing a policy is the insurer’s claim settlement ratio (CSR). This ratio refers to the number of claims settled against the number of claims raised.
If you want to know more about the claim settlement ratio and its importance, then read this article.
A term insurance policy secures a policyholder’s family in case of an unfortunate event. For example, if a policyholder dies during the term of the plan, then the insurer can provide the sum assured to the beneficiaries. Therefore, every person should consider purchasing a policy because it can help them reduce the financial burden if an unforeseen situation occurs.
While people consider the sum assured amount and premium, it is also important to know the claim settlement ratio of the insurer.
Claim Settlement Ratio
The CSR refers to the number of claims settled against the number of claims raised. The Insurance Regulatory and Development Authority of India (IRDAI) makes a ratio of all the insurance providers and publishes them every year. The higher the ratio, the higher the likelihood of getting a claim approved. While it is important to check the claim settlement ratio, a person should know the number of claims an insurance provider receives.
People purchase term insurance to provide financial protection to their family. Therefore, an insurance provider with a high CSR increases the likelihood of the beneficiaries getting their claims approved. Thus, reducing the financial burden in case of an unfortunate event.
Here are some important things people should know about the claim settlement ratio-
● It refers to the number of claims settled against the number of claims received.
● It is calculated across all insurance products of every insurance company.
● While purchasing a policy, a person should check the consistency of the claim settlement ratio. It is recommended to check the insurance provider’s CSR of the last five years to know if it has a high ratio consistently.
● A person can also check IRDAI’s annual report on the private and public insurance company’s CSR.
Why is it Important to Select an Insurance Company with High CSR?
● The CSR helps in understanding how an insurance company handles the claims.
● The likelihood of a claim getting approved increases if an insurance provider has a high claim settlement ratio.
● The CSR helps in understanding the credibility of the insurer.
Here is the Process of Claim Settlement-
● File a Report
The first step is to file a report quickly. The claim can be reported at a branch of the insurance company or online. Customer support can also be contacted for filing a claim.
● The Claim Process
Apart from the claim settlement ratio, an individual should also check the claim settlement process time. It is recommended to opt for an insurance company with a quick settlement process.
Once the documents are assessed and approved, the settlement can be provided.