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Life insurance is an agreement between the policyholder (insured) and the insurance company (insurer), where the insurer agrees to pay the sum assured of the policy when the insured dies as per the conditions mentioned in the policy document.

The sum assured of the policy is also called as death benefits. The insured pays periodic premiums to keep the policy active. The insured will nominate a beneficiary to receive the proceeds of the life insurance policy.

1.Why is Life Insurance Important?

The modern world is full of uncertainties. By keeping the interest of your dependents in mind, it’s only wise to avail life insurance to secure their future financially. You can provide for your family even when you are not around.

2.Who can be the Beneficiary?

At the time of signing your policy document, you need to nominate the beneficiary(s). You are allowed to nominate more than one beneficiaries by specifying their shares from your life insurance policy. Generally, blood relatives and spouse are chosen as beneficiaries. However, you are allowed to nominate friends by specifying reasons, to avoid conflicts with the legal heirs.

3.Who can Claim Life Insurance Policy?

Only the beneficiaries are allowed to claim the proceeds of a life insurance policy. Even though you are a legal heir and you are not designated as a beneficiary, then you cannot claim the proceeds of the policy.

4.What is Claim Settlement Ratio?

The claim settlement ratio of an insurer is the number of claims settled against the number of claims filed: higher the ratio, better the insurer. When choosing the insurer, you must check the claim settlement ratio. What is the point of availing life insurance if your insurer rejects the beneficiary’s policy claim? Hence, you need to ensure that your insurer has a good claim settlement ratio.

5.IRDAI Report on Insurers’ Claim Settlement Ratio

The insurance watchdog Insurance Regulatory and Development Authority (IRDAI) releases the claim settlement ratio of all life insurers every year. You should mandatorily check this data before deciding on the insurer. The following table shows the claim settlement ratio of life insurers for the FY 2017-18:

 

Life Insurers

Number of Claims Filed

Claims Settled

Claim Settlement Ratio 2017-18

Max Life

10332

10152

98.26%

LIC of India

739082

724596

98.04%

Tata AIA Life

2850

2793

98.00%

ICICI Prudential Life

11459

11216

97.88%

HDFC Standard Life

12566

12289

97.80%

Bharti Axa Life

888

860

96.85%

Exide Life

3357

3250

96.81%

SBI Life

18885

18274

96.76%

DHFL Pramerica Life

592

572

96.62%

Aditya Birla Sun Life

5491

5292

96.38%

Aegon Life

554

530

95.67%

Edelweiss Tokio Life

189

180

95.24%

Canara HSBC OBC Life

837

797

95.22%

Reliance Nippon Life

8987

8553

95.17%

Aviva Life

1118

1056

94.45%

Kotak Mahindra Life

3074

2881

93.72%

Future Generali Life

1291

1202

93.11%

Star Union Daichi Life

1241

1145

92.26%

Bajaj Allianz Life

14315

13176

92.04%

IDBI Federal Life

1161

1068

91.99%

PNB Met Life

4089

3726

91.12%

India First Life

1810

1626

89.83%

Sahara Life

672

556

82.74%

Sriram Life

3146

2524

80.23%

Claim settlement ratio is a crucial factor to consider as it depicts an insurer’s trend of settling claims. You must compare the claim settlement ratio of various insurers before choosing one.

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