When a policyholder buys insurance, S/he anticipates that the insurance company will support them and their family during uncertainty with a smooth claim settlement process. But how can someone find out whether an insurance firm settles claims smoothly when they buy the policy? The answer lies in the claim settlement ratio. When buying the term plan, it is very important to look at the ratio. In this article, you will get to know why the claim settlement ratio holds importance and how to file a claim if the need arises.
Why do you need to know your insurer's claim settlement ratio?
The percentage of claims paid by the insurance company to total claims received in a given year is called the claim settlement ratio, sometimes referred to as the claim paid ratio. The likelihood that the insurance company will accept and settle your claim increases with the claim settlement ratio.
To narrow down their choices for an insurance company, some people look at the policy's features and advantages, its ratings, and how friendly its customer service is. However, a lot of people neglect to look up the insurance provider's claim settlement history. An ideal ratio is between 90% and 95%. Reasons to look up the claim settlement ratio of your insurer:
- Reliable metric: It is a useful metric for evaluating an insurer's dependability, which indicates whether or not the insurance company pays the beneficiaries the whole amount of the death benefit. Investing in term insurance plans loses its entire purpose if claims are not settled. Furthermore, a higher claim settlement ratio suggests that the insurer is more likely to resolve any future claims you make.
- It helps determine whether your family members will have financial security: The cost of term insurance plans is determined by the premiums paid and the anticipated profits upon the insured's passing. The insurance payout can be used by the beneficiaries to cover a variety of financial needs, including paying off debt, covering daily expenses, and funding educational costs. You can feel secure about the financial future of your dependent by looking at the insurance provider's claim settlement history.
Determining the claim settlement ratio is therefore essential when acquiring a term insurance plan from a specific provider. You can do this by going to the Insurance Regulatory and Development Authority of India (IRDA) website. You can check the industry data to see if the insurance company you have chosen has a high claim settlement ratio.
What is the life insurance claim settlement process?
In the unfortunate event that the insured passes away too soon, beneficiaries would get life insurance benefits. Claims for life insurance generally fall into three categories:
- To file a death claim
The steps to submit a death claim are as follows.
First step: Written notification of claim
The beneficiary is required to notify the insurer of the claim right away. Name of the insured, policy number, date of death, place of death, claimant, etc. A claim notice form can be obtained by either contacting the insurance company online, requesting them, or visiting any of the insurer's local offices. The following information is required from the beneficiary.
- Their entire name
- Number of policy
- Full name of the deceased
- The time and place of the death
- Reason of death in the form
Second Step: Complete and submit a claim form:
The following documentation is needed in the event of a policyholder's natural death.
- Original policy
- Copy of the death certificate
- Properly filled out and signed claim form.
- In the event that a hospital certificate is needed
- Post-mortem report
- Test results and discharge summaries are among the medical records of the deceased that are included.
- A copy of the original FIR
- Other documentation (as requested by the insurance company)
- Death as a result of a health issue
- Filled out and signed original policy documentation for the claim
- Details of the nominee's bank account (such as a canceled cheque or bank statement)
- A death certificate is given and issued by the local authority
- Medical documentation
- Declarations from the attending physician and the treating doctor
Ensure that all required documentation is submitted for a seamless settlement of the claim. Documents such as a death certificate, evidence of the insured's age, the original policy, etc., must be submitted by the nominee. After obtaining the required paperwork, the insurance company has 30 days to make its final decision regarding the policyholder's claim. But, there can be a circumstance when the insurance company needs to conduct additional studies. In this case, the insurance company has six months from the date it received written notification of the claim to resolve it.
- Claim against add-on riders: To expand existing insurance coverage, riders can be added to basic term insurance plans. The rider in question determines how a claim is handled. For instance, the Critical Illness Rider requires medical history documentation, such as a record of the first diagnosis, a doctor's report, etc. For the accidental disability rider, certain documents are required, such as a copy of the police report, a certificate of disability signed by the attending physician, medical records, etc.
- Survival and Maturity Claims
The insurance company will make a final payment to the policyholder if they survive the tenure and will give the proceeds on the policy's maturity date. The total payout is calculated by adding bonuses and incentives to the cash promised. Through the issuance of a bank discharge form, the insurance company notifies the insured. When returning the form to the insurer, make sure to include a copy of your bank passbook, a canceled cheque, a government-issued photo ID, and the original insurance paperwork. Documents needed to claim maturity and survival benefit:
- The policyholder's picture ID
- Original Policy
- Details about the policyholder's bank account (such as a canceled cheque or bank statement)
- Completed Policy Discharge Document
At last,
A seamless settlement of the claim will be facilitated by the submission of the necessary paperwork, including a copy of the policy and an accurately completed claim form. To know in advance whether your claim will be settled smoothly, it is important to look at the claim settlement ratio, which will indicate how fast your claim will be processed.
