People buy insurance policy not only for financial security but for investment purpose too. While choosing insurance, it is very crucial to ensure that insurance policy would serve the purpose of financial security for legal heirs, besides being an investment channel for us.
Claim Settlement Ratio should be the foremost criterion before choosing life or non-life insurance policies and companies. Here comes the catch; how do we assess the companies? Which company paid the most number of insurance claims and how did companies respond to the grievances in the past. The annual report of the the IRDAI (Insurance Regulatory and Development Authority of India) might come handy to get an idea on this.
When it comes to paying out insurance claims, Life Insurance Corporation of India (LIC) has maintained an impeccable reputation for the past many years.
Among all life insurance companies, the state-owned life insurance company has once again topped the list in terms of zero pending complaints and best death claims settlement, according to the IRDAI report.
According to the annual report published by the insurance regulator, LIC has settled 98.31 percent of claims compared to 93.72 percent by its private sector peers. Only 0.97 percent of individual death claims getting rejected by LIC in 2016-2017.
Claim Settlement Ratio is based on volume of claims settled. It is the total number of death claims approved by an insurance company in a financial year, divided by the total number of death claims received by the insurance company. It is measured for all products of the company put together (not term insurance plans alone).
LIC has remained on the top of the list every year, ever since the IRDAI started announcing the annual data on claims settlement and grievances. This is despite competition from many other players.
During 2016-17, private life insurers resolved 99.73% of complaints reported, while LIC resolved 100% of the complaints, shows the IRDAI report. There are no pending complaints of LIC as on March 31, 2017.
Headquartered in Mumbai, the LIC is the largest insurance company in India. It was founded in 1956 when the Parliament of India passed the Life Insurance Corporation Act that nationalised the insurance industry in India.