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In the modern age of online insurance platforms, comparing term insurance policies has never been easier. With a few clicks, you can see a range of options with different premiums and features. However, with so much information available, it’s easy to get lost in the details and overlook the most important factor: the claim settlement ratio. This metric is your most powerful tool for comparing and choosing a policy online.
Here’s a step-by-step guide on how to use the claim settlement ratio to make a smart, informed decision:
Step 1: Don’t Just Look at the Premium
When you use an online aggregator, the first thing you’ll see is a list of policies arranged by premium, usually from lowest to highest. While a low premium is tempting, it should never be your sole decision-making factor. A cheap policy from an unreliable insurer is no good to your family in a time of need. Instead of clicking “buy” on the cheapest option, use the premium as a starting point.
Step 2: Find the Claim Settlement Ratio
Most reputable online platforms and insurance company websites will prominently display the claim settlement ratio for their term insurance products. This data is published annually by the Insurance Regulatory and Development Authority of India (IRDAI), making it an official and reliable source. Look for a CSR that is consistently high—ideally above 95%—over a period of at least 3-5 years. A high and consistent ratio is a strong indicator of an insurer’s reliability.
Step 3: Compare Insurers Based on CSR
Once you have identified the claim settlement ratio for the policies you are considering, use it to filter your choices. Create a shortlist of insurers that consistently maintain a high CSR. This will immediately eliminate companies that have a poor track record of settling claims, helping you narrow down your options to only the most trustworthy providers.
Step 4: Go Beyond the Simple Percentage
While the overall CSR is a great starting point, dig a little deeper for a more accurate comparison:
- Look at the number of claims settled: A company with a 98% CSR on 5,000 claims is generally more reliable than a company with a 99% CSR on only 100 claims. The sheer volume of claims handled effectively is a testament to the insurer’s robust processes.
- Check the claim amount settled: Some companies also publish the percentage of claims settled by amount. This is particularly important if you are buying a high-value term insurance policy. It shows you whether the insurer is as efficient at settling large claims as it is at settling small ones.
Step 5: Factor in Other Key Metrics
After using the claim settlement ratio to shortlist a few insurers, you can then consider other important factors:
- Solvency Ratio: This metric indicates the company’s financial health and its ability to meet its long-term financial obligations. An IRDAI-mandated solvency ratio of 150% or more is considered healthy.
- Customer Reviews: Look for genuine customer reviews and testimonials to get a sense of their claim settlement process and customer service.
- Customer Service: Consider how easy it is to get in touch with the company’s customer support. A good company will have a seamless process for you and your family.
Your term insurance policy is a promise, and the claim settlement ratio is your guarantee that the promise will be kept. By using this metric as your primary comparison tool, you can navigate the sea of online options and choose a policy that offers genuine peace of mind.
