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IRDA Claim Settelment

IRDA Claim Settelment

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Published by Prabhash Singh
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Published by: Prabhash Singh on Jul 05, 2012
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Page 1Claim Settlement Ratio for Life Insurance Companies 2010-11 | bachatkhata.com5/24/2012 2:26:36 PMhttp://www.bachatkhata.com/2012/02/claim-settlement-ratio-for-life-insurance-companies-for-2010-11.html
1
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p.m
 
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Safe
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.
com
 /
LifeInsurance
-
plan
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Insurance
Features
,
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.
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Claim Settlement Ratio for Life Insurance Companies for 2010
-11
by
Gopal Gidwani on
February
7, 2012 ·100
comments
inFinancial Planning
 
,
Insurance
,
Others
,
Uncategorized
 
Ads
by
Google
 
Lic Insurance
 
Insurance In
 
Max
Insurance
 
Ing
Insurance
Introduction
Naresh
Malhotra is
a 30
year
old
marketing
executive
.
He
is on the lookout
for
a
pure
term
insurance plan
for
a
cover
of Rs
. 50
lakhs
for
a
period
of 20
years
.
He
is in
a
quandary
over which
company
to select
for
purchasing
a
term
insurance
plan
.
Term
insurance plans are also
popularly
known as
protection
plans
’.
These plans provide risk cover
for loss of 
income
,
financial
liabilities
(
home
loan and other loans
),
financial responsibilities
(
children
’s
education
,
marriage etc
.)
against
untimely
death
of 
the
family
bread earner
.
Naresh has
done
some
research on different
term
insurance plans available in the
market
.
He
is in
a
dilemma on two
fronts
.
1)
Should
I go
for lower premium???
Naresh
is quite
surprised
by
the
amount
of 
variance
(
difference
)
in the
premium
charged
for
term
plans
(
with
same
features
)
by
different companies
.
On
one hand there is
LIC
’s
Amulya
Jeevan
Term
Plan
that
charges
Rs
. 12,850
for
a 30
year
old
personfor
a
cover
of Rs
. 50
lakhs
for
a
term
of 20
years
.
On
the other hand
we
have
Aegon
Religare
’s
iTerm
Plan
that
charges
Rs
. 4302
for
the
same 30year
old
person for
a
same
cover
of Rs
. 50
lakhs
for
a
same term
of 20
years
.
So for
a
term
plan with
same
features
,
the
premium
charged
by
LIC is
a whopping
3
times
 
more
than the
 
Page 2Claim Settlement Ratio for Life Insurance Companies 2010-11 | bachatkhata.com5/24/2012 2:26:36 PMhttp://www.bachatkhata.com/2012/02/claim-settlement-ratio-for-life-insurance-companies-for-2010-11.html
every
100
claim
requests received
by
the
company
.
LIC
s
claim settlement
ratio
for
the
year
2010
-
11
was
97
.03%,
which in
simple terms means
out
of 
every 100 claims
LIC received during the
year 2010
-11,
it
paid 97
claims
.
This
does
not
mean
the
remaining
3%
claims
were rejected
.
Some
claims might
be
still
under consideration
,
someinquiry
pending while
somemay
have been rejected
for
various
reasons
.
In
a
term
plan
,
claim settlement
ratio is an
important
indicator
of 
customer service
,
which needs to be given
little more
precedence over other aspects
,
whileselecting
a
term
insurance plan
.
The reason being
it
is
important
to ensure
that your
beneficiaries do not face
much
problems in receiving the
claim
in case
of 
your
unfortunate
demise
.
Low premium
Vs
.
High
claim settlement
ratio
dilemma!!!
While selecting
a
term
plan
,
Naresh
is in
a
fix whether he should give
more importance
to the lower
premium
charged
for
online
term
plans
by
private
insurers or
give
more importance
to the high
claim settlement
ratio
maintained by
LIC
year
after
year
.
Naresh
is unable to decide
.
Like
Naresh
there are
lot
of 
other people
who
are caught between low
premium
and high
claim settlement
ratio and are unable to decide whom should
they
give preference over theother
.
In
this
article
we
try
to present
a
comparison
of 
the
claim settlement
ratio
of 
insurance companies
(
for
the
years 2009
-2010
and 2010
-2011)
alongwith the
premium
charged
by
these companies
for
their
term
plans
.
We
sincerely
hope
that
to
some
extent this
article
helps people
like
Naresh
and othersdecidewhich
term
plan
they
should go
for
.
Please
note
:
When choosing
a
term
plan
,
while
claim settlement
ratio and
premium
charged are two
veryimportant
aspects
,
they
are not the
only
ones
thatmatter
.
Some other
equally important
aspects
that
need consideration are the
person
’s (
need
)
requirement
,
features
of 
the plan
,
customer service
of 
the
company etc
.
In
the below
table let
us
look 
at
the comparison
of 
claim settlement
ratio
for
life
insurance companies
for
the
year 2009
-10
and 2010
-11
and the
premiums
charged
by
these companies
for
their
term
plans
.
InsurerClaimSettlementRatio2010
-11
ClaimSettlementRatio2009
-10
Term
Plan
Premium
charged
LIC 97
.03 96.54
Amulya
Jeevan 12
,850**
HDFC
Life 95
.41 91.14
Click 
2
Protect
5,625
Birla Sunlife 94
.66 89.09
Protector
Plus
7,721
ICICI
Prudential 94
.61 90.17
iCare
6,783
ING
Vysya 90
.49 89.30
ING
Term
Life 12
,265
Kotak Life 89
.30 86.97
ePreferred
5,487
Bajaj
Allianz 88
.69 88.19
New
Risk Care
II
Bharti
AXA 87
.17 77.8
iProtect 4302Metlife 85
.43 82.54
MetProtect
5,294
Aviva 84
.15 87.11
iLife
4,436**
SBI
Life 82
.24 83.27
Smart
Shield 7956IndiaFirst 82
.01 53.85
AnyTime 6162**
TATA AIG 81
.93 78.17
 
Page 3Claim Settlement Ratio for Life Insurance Companies 2010-11 | bachatkhata.com5/24/2012 2:26:36 PMhttp://www.bachatkhata.com/2012/02/claim-settlement-ratio-for-life-insurance-companies-for-2010-11.html
MaxNew
YorkLife 77
.96 65.51
Canara
HSBC 71
.02 38.71
IDBI
Federal 64
.92 49.52
Shriram Life 55
.69 39.54
Sahara 53
.23 63.06
Aegon
Religare 52
.31 48
iTerm
Plan 4302
DLF
Pramerica 51
.22 40
Future Generali 50
.52 38.85
Source
:
Claim settlement
ratio
has
been taken
from
IRDA
Annual Report 2009
-10
and 2010
-11.
The
claim settlement
ratio
mentioned
is the overall
claimsettlement
ratio
for
the insurance
company
(
all
insurance products
)
and not
just for
term
plans
.
The
premium
calculations have been done
from
therespective insurance
company
websites
.
Please
note
:
1)
The
premiums
shown
in the above
table
are
for
a 30
year
old
male
for
a
sum
assured of Rs
. 50
lakhs
for
a
term
of 20
years
.2)
In
the above
table
where
only
the
premium amount
is
mentioned
,
it means it
is inclusive
of 
service tax
3)
Where ** is
mentioned
next to the
premiumamount
,
itmeansit
is not
sure
whether the
premium
is inclusive
or
exclusive
of 
service tax
.4)
Interested
buyers
are requested to recheck these quotes with respective insurance companies before purchasing
a
term
plan
.
These rates
may
not be fixedand are
subject
to change
.5)
We are not representing
any
particular insurance
company
.
As
can be seen
from
the above
table
the
claim settlement
ratio
of 
most life
insurance companies
has
improved in 2010
-11
as
compared to 2009
-10.
LICremains
a
clear leader in
terms
of 
claim settlement
ratio with 97
.03%
for 2010
-11
compared to 96
.54%
for 2009
-10.
The top three private insurancecompanies in
terms
of 
claim settlement
ratio are
HDFC
Life
(95.41%),
Birla Sunlife
(94.66%)
and
ICICI
Prudential
(94.61%).
There are also
some
companies
for
which
claim settlement
ratio
has
gone
down for 2010
-11
as
compared to 2009
-10 –
companies
such as
Aviva LifeInsurance
,
SBI
Life and Reliance Life
.
Low Premium
:
Apart
from claim settlement
ratio
,
the
amount
of 
premium that
needs to be paid
for
availing insurance cover
(
sum
assured
)
is also an
important
consideration
for
selection
of 
a
term
insurance plan
.
There can be significant difference in the
premium
of 
different insurance companies
for
sameamount
of 
insurance cover
.
Apart
from
offline
term
plans
,
lot
of 
insurance companies have also started offeringonline
term
insurance planssince lastcouple
of 
years
.
Premium
for
an
online
term
insurance plan
’,
can be
as low as 40
-50%
as
compared to offline
term
insurance plans due to reduced officeand
intermediary
expenses
.
As
can be seen
from
the
table
above
,
in
terms
of 
premium
,
LIC
has
the highest
premium
and
Aegon
Religare
&
Bharti
Axa
have the lowest
premium
.
Thetop three
term
plans in
terms
of low
premium
are
iTerm by
Aegon
Religare
,
iProtect
by
Bharti
Axa
, i-
Life
by
Aviva
.
All three
of 
them
are online
term
plans
.
Our
take on the above
table
Apart
from
the above information
,
in this section
we
try
to give
you some
pointers which
may
be helpful to
you
in
making up your mind on
which
term
insurance plan to go
for
.
1)
LIC
Amulya
Jeevan
:
LIC leads in
terms
of 
highest
claim settlement
ratio
.
Despite charging high
premiums
LIC continues to have the highest
market
share and continues to
remain
the undisputed king
.
LIC
’s
Amulya
Jeevan
comes
with
a
minimum sum assured of Rs
. 25
lakhs and maximum
tenure
of 35 years
.
For
those looking
for
a
sumassured below Rs
. 25
lakhs
,
LIC offers Anmol
Jeevan
.
Last
year
in September 2011 LIC did
make
an announcement
that they
are
soon
coming
out with
a
cheaper online
term
insurance plan
.
But after
that
there is no update on
that
news
and the wait
for
a
cheaper online
term
plan
from
the LIC stable continues
.
Conclusion
:
People
who
give the highest weightage to
claim settlement
ratio over
everything
else can choose to go with LIC
.

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