FAQs 464 views November 14, 2018

There are various parameters that one must consider before buying a term insurance plan, one of them being the claim settlement ratios of the various insurers selling term policies. Term insurance plans promise death benefits to dependents in return for very low premium amounts from policyholders. A higher claim settlement ratio means that the insurer is more likely to process the claim and hand over death benefits to the nominee(s) of the insured, thus, serving the purpose of paying for term insurance.

Term Insurance

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Claim Settlement Ratio is the ratio of the total number of claims paid to the customers by any insurance company to the total number of claims received by the insurance company in any particular year.

Claim Settlement Ratio = (Total claims approved and paid)/(Total claims received by the insurer)*100

Claim settlement ratio is always expressed in percentage. One can view the claim settlement ratios published annually by the Insurance Regulatory Development Authority of India (IRDAI) on its website.

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