Online term insurance is getting quit popular day by day . Most important criteria to compare are ...
- Claim settlement ratio
- Size of insurance Company / No of yearly policies issued .
- The Fine Print – Terms & Conditions.
- Insurance Premium
Some of the insurance companies give late surprises of increase in premium after medical test . So , before applying make sure how much refund you will receive in case you gets late surprise of hike in insurance premium and not wish to continue with same policy .
I think most important data to compare is claims repudiated data instead of plain claim settlement ratio . Most of the insurance companies repudiate claims with higher amount which give them two befits first improves their bottom line(profit) in P&L accounts and secondly it does not harm much to their claim settlement ratio since claim settlement ratio is based on number claims . Generly, claim settlement ratios is mostly looked by insurance buyer while comparing policies.
So , if you are buying term insurance with comparatively low sum assured then you should look into claims repudiated Number (declined) percentage . But if your sum assured is high then you should look into claims repudiated benefit amount percentage instead of just plain Claim settlement ratio while comparing policies .
IRDA Claim settlement data for FY 2012-13 .
If you are investor of Max India Ltd then you will see last year company has improved lot on Claim settlement parameter . It will bring more business to them if they maintain it for coming years as well . No doubt Max India need to improve on repudiated(rejected) benefit amount percentage front .
One more interesting observation about ICICI Prudential and HDFC Standard . ICICI Prudential is claiming best pvt sector insurance settlement claim ratio of 96.29 but rejected claims count percentage of I HDFC Standard(2.62%) is better than ICICI Prudential (3.63%) and claims repudiated(rejected) benefit amount of HDFC Standard(6.22%) is far better than ICICI Prudential (8.57%) . Almost all the major insurance companies are having claims repudiated benefit amount percentage is higher than repudiated (rejected) Numbers of policies count percentage . However , There is only one major exception is SBI Life which has repudiated (rejected) Numbers of policies count percentage (3.69 %) vs claims repudiated(rejected) benefit amount percentage (2.68%)
Note : Claim Settlement Ratio refers to the % of claims settled by an Insurance Company against the number of claims submitted . Ideally it should be 100 - repudiated (rejected) Numbers of policies count percentage but some policies goes on hold or carry forward to next year.
sir,
ReplyDeletethanks for a very informative and enlightening article .In the market for term insurance myself and this blog post could not have come at a better time.
The post is perhaps one of the finest examples of your insightful and philanthropic mindset which enabled you to look beyond simple claims to settlement ratio (and of course,price) to enable a retail investor to make better decisions.
Wishing you a very healthy, wealthy and successful new year ;p
Shravan
sir,
ReplyDeleteThis article is really nice , Necessary information provides us. i want to congratulate to author doing this great job.
Article gives a better understanding to insurance sector and gives a best alternative for the investment.
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Informative article, it provide better understanding to the insurance and investment, it is good to have term insurance and life insurance both for investment as well as safety.
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