Insurance is a surefire way to protect your assets and secure the future of those you love. Though it does matter how and from whom you purchase your insurance policy.
It can be life insurance, health insurance, car insurance, or anything else, you need reliable providers to ensure the safety and security of your assets and your loved ones. But, how do you do it?
In this comprehensive guide, I will guide you in understanding what is claim settlement ratio is, how it matters for insurance, and its benefits. So, keep on reading to secure your insurance!
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What is the claim settlement ratio?
The claim settlement ratio is a numeric representation of the insurance provider’s reliability. It shows the total claims filed by policyholders and the number of claims successfully settled by the insurer. A claim settlement ratio consists of two numbers or can be represented as a percentage to demonstrate the insurance provider’s reliability.
For instance, if an insurer received 100 claims for term insurance policies and settled 90 claims, then the claim settlement ratio can be expressed as 90:100 or as 90%.
As you can see in this example, the insurance provider fulfilled their promise of paying death benefits to 90/100 policyholders. This indicates that the policy provider is very likely to settle claims. You can verify if the remaining 10% were falsified claims or petty claims that were rejected.
The higher the claim settlement ratio of the insurance provider, the higher its reliability. When choosing an insurer for your traditional life insurance plans or term insurance policy, you need to check the claim settlement ratio to ensure the insurer’s credibility in the market.
How Does It work?
These days, due to the advancement of technology, insurance providers offer most of their information online on their portal. However, if you cannot find the number online, don’t fret. If you have a particular insurer in mind, you can contact them directly and request their claim settlement ratio.
Based on the number, you can determine if you want to insure your life, health, car, property, etc., with your chosen insurer. If not, you can use the claim settlement ratio along with the premium, sum assured, and benefits of your desired policy to create a comparative chart and make an informed decision.
How Term Insurance Claim Settlement Ratio Matters?
Term insurance is a form of life insurance policy that is available to you at very reasonable premium rates and for a higher sum assured. You can choose a policy tenure of 10-99 years, which implies that you can purchase both short and long-term policies.
Traditional term insurance does not pay maturity benefits if you survive the policy tenure. However, if you opt for term insurance with a return of premium, then upon surviving the policy tenure, you are entitled to the maturity benefit.
The maturity benefit of any form of life insurance policy acts as a savings plan. The premium that you pay over the years is accumulated and paid back to you as a lump sum amount. You can use the money to secure another policy or invest it in the market, utilise it to overcome financial challenges or set up a corpus for yourself. The maturity benefit is as important as the death benefit when considering a company’s claim settlement ratio.
How the term insurance claim settlement ratio matters is that it provides a clear idea about the term insurance provider’s reliability, credibility, and responsibility. Term insurance, or any form of insurance for that matter, is a financial contract. You pay regular premiums to purchase a policy for a certain sum assured. In return, the policy provider promises to uphold the terms of the contract and pay the death benefit, maturity benefit, or rider benefits in your plan if and when applicable.
Importance of Claiming a Settlement
The claim settlement ratio of term insurance policies provides you with an idea of exactly how many term insurance claims the insurer has settled over the years. If the number is higher, then you can rest assured that the insurance provider will settle legitimate claims, and you can certainly consider purchasing your policy from them.
On the other hand, if the claim settlement ratio is low, it indicates that the insurance provider is not very reliable and may be reluctant to pay the death benefit or maturity benefit.
Term insurance plans are pretty straightforward. The biggest benefits are the death benefit and maturity benefit of the plan.
Therefore, if the insurance provider has a habit of reneging on payment, then the future of your loved ones in the event of your demise may be in jeopardy. It is not enough that an insurer offers policies at low premiums. They must also be reliable.
Conclusion
The matter of how the term insurance claim settlement ratio matters is far more important than purchasing a policy for a cheaper premium. It is pivotal to conduct thorough research into the reliability of an insurer when purchasing a plan.
This ensures that in the event of death. Your beneficiaries will receive the death benefit. It is also important to determine that, should you survive the policy tenure, the insurance provider will live up to their promise and pay the maturity benefit, if applicable.
