Life Insurance
Deciding which company to choose for Life Insurance has always been tough and with so many new entrants customers are spoiled for choice. It’s always a dilemma which factors to look at while choosing your life insurance provider – cost, convenience, past performance, claim settlement rate, etc.
I think the most important factor should be tension free claim settlement for your loved ones once you are not there.
And in that case the recent Annual Report (2008-09) from IRDA shows LIC (Life Insurance Corporation) tops the chart. It has claim settlement rate of 95%, which is 5% higher than its nearest competitor Max New York Life with 90% settlement rate. But if you have a look at the premium rates for term plans LIC generally has the highest rate.
So in all you can think of LIC as a costly but still the one with most hassle free settlement for your insurance.
The other thing I could see is Companies with higher number of settled claims have a bit lower claim settlement rate in terms of amount which means that low value claims are settled more easily than higher value claims which makes sense for companies. So the next question is should you have multiple small policies rather than one large value life insurance policy? Think about this – it would cost you more but probably have higher chances of getting claim paid!
I am publishing the chart which for 2008 – 09 which shows the Life Insurance claims filed in a year both in terms of number and amount and the percentage of claims settled, rejected and pending for each company. I hope this would help you to select the right insurance provider for you.
| Total Claims for the Year | Claims Paid | Claims Rejected | Claims Pending at the end of Year | |||||
| # of Policies | Benefit Amount | # of Policies | Benefit Amount | # of Policies | Benefit Amount | # of Policies | Benefit Amount | |
| LIC | 5,91,097 | 4,444 | 95% | 94% | 1% | 2% | 2% | 3% |
| Max new York Life | 3,938 | 78 | 90% | 85% | 8% | 12% | 2% | 2% |
| Birla Sunlife | 2,757 | 75 | 89% | 79% | 10% | 20% | 1% | 1% |
| HDFC Standard | 2,898 | 49 | 88% | 77% | 5% | 7% | 7% | 17% |
| Bajaj Allianz | 12,011 | 213 | 87% | 82% | 8% | 11% | 4% | 7% |
| Reliance Life | 3,701 | 46 | 87% | 76% | 6% | 9% | 8% | 15% |
| ICICI Pru | 10,743 | 128 | 87% | 79% | 5% | 7% | 8% | 13% |
| ING Vysya | 1,523 | 28 | 77% | 62% | 8% | 20% | 14% | 17% |
| Kotak Mahindra | 1,300 | 26 | 77% | 63% | 9% | 16% | 14% | 20% |
| SBI Life | 4,260 | 62 | 77% | 76% | 15% | 11% | 8% | 13% |
| Aviva | 1,438 | 31 | 72% | 72% | 19% | 20% | 9% | 8% |
| Tata AIG | 2,700 | 44 | 61% | 64% | 28% | 12% | 11% | 24% |
| Metlife | 729 | 32 | 58% | 53% | 23% | 24% | 19% | 23% |
| Future Generalli | 30 | 1 | 57% | 59% | 30% | 35% | 13% | 6% |
| Bharti AXA | 203 | 6 | 53% | 52% | 45% | 45% | 2% | 3% |
| Sahara | 439 | 4 | 45% | 49% | 12% | 0% | 43% | 50% |
| Shriram | 791 | 11 | 39% | 37% | 24% | 30% | 36% | 32% |
| Canara HSBC | 16 | 1 | 31% | 28% | 19% | 7% | 50% | 65% |
| IDBI Fortis | 39 | 1 | 31% | 25% | 5% | 4% | 64% | 72% |
| Aegon Religare | 7 | 1 | 0% | 0% | 71% | 79% | 29% | 21% |
| DLF Pramerica | Not Available in 2008 – 09 | |||||||
| Star Union | Not Available in 2008 – 09 | |||||||
| All Private | 49,523 | 835 | 82% | 76% | 10% | 13% | 8% | 11% |
| Industry Total | 6,40,620 | 5,279 | 94% | 91% | 2% | 3% | 3% | 5% |
I am in process of going through the annual report of IRDA and would publish some interesting facts and figures about Indian Insurance providers in next few days.
You can read about The updated Claim Settlement Ratio for 2010-11 here.
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1. LIC is the oldest Life Insurance company and Govt owned, so its considered the safest. But all private players are also safe as IRDA keeps a check on their financials.
2. Infact if you comfortable, you should go with online term insurance policies. According to the insurance companies, they are finding declarations made in online policies are better and hence they are finding better settlement rations for online insurance. The flip side is you won't have an agent to do the run around!
3. LIC has not come out with its online term life insurance but there was news of LIC launching such policy in near future.