Life Insurance – Claim Settlement Ratio – 2010-11

Claim Settlement Ratio is probably the most important factor while buying insurance. This becomes even more critical for Life Insurance as you would like your dependents to run pillar to post to claim your sum assured in case of unfortunate death. The recently published Insurance Regulatory And Development Authority – IRDA Annual report 2010-11 has the settlement ratio for the following life insurance companies in India.


Click here to check Life Insurance – Death Claim Settlement Ratio – 2011-12


LICMetlifeCanara HSBC
HDFC LifeAvivaIDBI Fedral
Birla SunlifeSBI LifeShriram
ICICI PrudentialIndia FirstSahara
ING LifeTata AIGAegon Religare
Kotak MahindraReliance LifeDLF Pramerica
Bajaj AllianzStar Union Dai-ichi LifeFuture Generali
Bharti AXAMax New York

Claim Settlement Ratio:

The table below gives the Settlement ratio for the above Life Insurance Companies:

Life Insurance – Claim Settlement ratio payout – 2010-11

As you can see LIC (Life Insurance Corporation) has the best Claim Settlement Ratio of more than 97% while Future Generali has the worst payout ratio of 50.5%.  But before you focus too much on these numbers, here are a few points you need to think about:

Life insurance companies have a very high rate of rejection in the ‘early claims’ – so if there is a claim made within 2 years of taking the policy, there is a far greater chance of it being rejected. So all the companies which have started operation in last five years would obviously have low settlement ratio.

You can read the previous Claim Settlement Ratio for Life Insurance Companies for 2008-09.

14 thoughts on “Life Insurance – Claim Settlement Ratio – 2010-11”

  1. Today I got a called from Insurance Regulatory and Development Authority (IRDA). The person asked me about my policies and my nominee and advised me that surrender your current policy & portability is best option for you.

    I’ve a Insurance with Kotak ( Kotak Super Advantage Plan) and I pay INR 3000/month from more than 2 years. The person who called me from IRDA asked me that your company “Kotak” is getting down and you will get less amount so it is better if you transferred your policy to top 4 companies of India i.e. ICICI Prudential, HDFC, Birla Sun Life & Reliance.

    He told me that from this portability you will have total amount in the company which you choose otherwise if you surrender your policy, you will be charged surrender charges and get less amount.

    We talked about 20 mnts and mostly he advised me to surrender my policy from Kotak and portability in any 4 companies mentioned above.

    Please help me to know what is this? and is really Kotak id getting down and i should surrender my policy?

    Thanks in advance.

    1. Hi Aaditya, whats happening with you is FRAUD call. Kotak is still healthy company and you should not worry about that. If you get subsequent calls you can also report the matter to the local police. Here is a notice from LIC warning investors about these fraud calls.

  2. Dear sir I am 25 years old engineer and right now earning around 29000/month( in hand salary). yet i have not started any kind of investments and also dont have any risk cover policy yet though I am intrested to start my investment and also take one online term insurance plan.

    But dear sir as a expert please advice me how i should plan to invest 5000/month and also which online term plan i can look for 50 lac sum assured.
    Some of company i researched for term plans based on low premium rate and claim settlement are.
    HDFC click to protect,Aviva I term, SBI shield etc need your advice to plan my stretigies .

    1. Its a good thing that you have started planning about your investments. I would advise you to buy any of the mentioned term insurance plans online, only if you have dependents. In case there are no dependent you can channelize those into Equity mutual funds, PPF, FD, as per your risk tolerance and returns expectations.

      You would agree that its very difficult to make a plan for someone without knowing the entire background, the goals and risk tolerance of an individual. But remember these while you invest:
      1. Never buy anything other than term plans from life insurance companies
      2. Invest in equities if you have a long time horizon (5 years or more) of investment. Take SIP route to invest in MFs.
      3. Invest in Balanced funds for 3 – 5 years.
      4. Invest in debt instruments for shorter time periods.

      Let me know in case of any specific queries.

  3. The IRDA annual report clearly differentiates death and non-death settlement.
    Your last statement warning readers to take this data with a pinch of salt is wrong. You are the third blogger after Manish and Shubra to make this mistake!

    If I read the IRDA annual report and if what is written follows the norms of common sense (a big IF perhaps?!) then this is what I infer:

    Total no of death claims: 8.51 lakh (851534 to be exact for all insurers)
    Maturity claims: > 50 lakh
    Survival benefits: >135 lakh

    no of death claims LIC addressed: 7.39 lakh (739502)
    no of death claims paid by LIC: 7.17 lakh (717529)
    So the death claim settlement ratio is 0.97 or 97%

    ref: pages 385, 292 (in the pdf file)
    The IRDA report does not have exact numbers for non-death settlements. Where it gives percentages it clearly says it is for death settlement.

  4. I truely appreciate your posts on Life Insurance Term Policy and others. Request you to post a Review on Health Insurance Policies available in the markets. I found, there are multiple permutations & combinations of features available and finding it difficult to choose a plan for myself. Thanks in Advance.

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