One of the most important considerations when selecting a term policy is the settlement ratio of the insurance provider. Read this post to know 5 of the top insurance providers as per their settlement ratio and some other factors that you should look into while making a decision.
A term policy is one of the most affordable ways to offer financial stability and protection to your loved ones in case of your unexpected demise. But with so many insurance providers to choose from, most people find it challenging to select the best for their term policy.
The settlement ratio is a smart way to assess an insurance provider. This ratio is calculated based on the total number of claims received and claims settled by the insurance provider. The IRDAI publishes a list of insurance providers with their settlement ratio every year.
Let us have a look at some of the top providers with regards to their settlement ratio and a few other factors that you should check before making a decision:
Top 5 Settlement Ratio of Term Insurance Providers
As per the list published by IRDAI for the year 2018/19, here are some of the top insurance providers-
| Insurance Provider | Death Claims Received | Death Claims Paid | Death Claims Pending | Settlement Ratio |
| HDFC Life | 12,189 | 11,031 | 2.3% | 97.62% |
| SBI Life | 14,876 | 13,303 | 3.20% | 96.69% |
| ICICI PruLife | 12,309 | 11,546 | 0.80% | 96.68% |
| Tata AIA Life | 3,873 | 3,659 | 1% | 96.01% |
| Reliance Life | 18,142 | 15,211 | 5.8% | 94.53% |
Selecting an Insurance Provider
While the claim settlement ratio is definitely an important consideration, there are a few other factors that you should look into when selecting the insurance provider. Three such important factors are-
- Financial Health of the Insurance Provider
For instance, in the case of a natural disaster, an insurance provider can receive multiple claims simultaneously. Only an insurance provider with excellent financial health would be able to settle multiple claims in a short duration. All the insurance providers have a solvency ratio which determines their financial health.
As per IRDAI, every insurance provider is required to have a solvency ratio of above 1.5. The higher the solvency ratio, the better is the financial health of the company.
- Optional Covers
If you are planning to buy a term plan, it will be smart to select additional riders. The insurance provider you select should offer at least a few additional rider options like critical illness cover, accidental death, income benefit, and waiver of premium.
While the riders increase the policy premium, they also significantly improve the scope of the policy. Also, note that the term plan of some of the insurance providers includes these aforementioned features in the base plan itself.
- Policy Premium
Last but not least is the policy premium. Once you have narrowed down the choices based on the points discussed above, the final selection can be made based on the policy premium. Prefer an affordable yet feature-packed term insurance plan from a reputed insurance provider.
Also, check the premium payment options. Some of the insurance providers also offer monthly premium payment facility.
Choosing the Best Term Plan
Now that you have a list of top 5 insurance providers as per their claim ratio and know the factors that you should look into, it shouldn’t be difficult for you to pick the best.
Rather than making an impulsive decision, spend some time understanding these points so that you have the necessary knowledge for making the right decision. As life insurance is one of the most important purchases of life, make a well-informed decision so that the policy is actually able to deliver the expected benefits.
