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  • Category: Insurance

    While buying a term plan, is it necessary to check the claim settlement ratio of a company?


    Do you know about the elements of term plan Insurance policy and is it necessary to check the features? Then go through this page to know about the pros and cons from our experts.

    What do you feel is a better way of buying a term insurance policy? Through an insurance agent or online?
    Confused over how much term insurance should I buy? Is there a magical formula to reach this figure?

    Please help me on this.

    Thanks in advance!
  • #145830
    Better buy through an agent. If there is any problem afterwards he will take care of the issue. It is always advisable to see the claim settlement ration of the company. There are many private companies which are offering various insurance schemes which are suitable for you and your family. Kotak is offering various schemes and you can go for that company. If you want any further details you can contact that company. Even you can contact me if you want further details.
    drrao
    always confident

  • #145838
    I strongly feel that term insurance plans must be purchased after checking the claims settlement ratio. Generally people subscribe to term insurance only checking the premium rate and if there is no provision of medical examination in the policy. I feel that this approach is faulty. We must not hide any information, take term policy by comparing the premium rates of the policies of different companies and also by claim-settlement ratio.

    If the claim-settlement ratio of an insurance company is poor, there is possibility of rejection of claim of the nominee of a policy-holder in case of unfortunate death of the policy-holder during the policy period. Such rejection defeats the very purpose of subscribing to term insurance. So, claim-settlement ratio of the insurance company is an important factor to short-list/decide term insurance policy.

    Caution: Explosive. Handle with care.

  • #145839
    Answering your questions in the order you have raised it

    1. Claims ratio: Yes, one of the important things to be checked is the claim settlement ratio. It gives an idea of how much difficult or how easy it is for the family to get the insured sum when the primary insured is unfortunately no more.It gives you the realistic figures of families who have applied and got the claim settled (the money in their hands).

    It's also useful to see the claims pending also. You can check many websites that compare many popular companies or check the IRDA(Insurance Regulatory and Development Authority) website directly. For instance ( claim settlement - LIC(98%)).

    2.online or agent: The traditional concept is that an agent is a physical person we can relate to and we will in the same region. The current concept is there are so many companies and so many agents jump from company to company, at the time of need the agent has either left the company or is no more useful to us. Once the family has relevant details, then the settlement is usually not an issue unless there is foul play or a suspicious death or hidden illnesses.

    Buying it online makes it easier and relatively economical. Online premiums can be anywhere between 10-25% cheaper than offline policies. As long as you choose a good company, then things should be fine. In case a company cheats then people can take the effective route of shaming the company in the media and local papers if the claim is genuine and money is not being given.


    3. how much to take: This is a question that has many parameters to be accounted into before deciding. One can option from 1 lakh to few crores but the key is to have the adequate salary or accounted income declared to give some idea that one will be able to pay the premiums annually.

    A lot of people mistake a term policy for an investment.It is not, it's what the family needs in the absence of the head or earn member. It depends on the family's needs, needs for long-term payments, assets that the family hold, salary of the insured person, inflation and growth rates of the country etc.In general, advisors suggest 8-10 times the average salary earned as the sum to be insured for. You can again check this with your circumstances from many websites that have term insurance sum calculator ( moneycontrol.com is one).

    If you still have doubts, then seek a known person who can guide you and then take a second opinion before taking the policy. Whatever you do, please do it before you next birthday as the premium meter jumps up significantly as your age goes up.

  • #146003
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    Yes, while buying a term plan, it's necessary that you consider the claim settlement ratio of the company as it clearly states the total number of claims approved by the company, divided by the total number of death claims received by the company.

    The Insurance Regulatory and Development Authority of India (IRDAI) publishes an annual report giving you a detailed claim ratio analysis.


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