Selecting the right term insurance plan is crucial, but it is also important to select the best term insurance companies in India because they have the highest claim settlement ratio. Let’s delve into this blog and explore the 10 best-term insurance companies.
What are Term Insurance Plans?
Term insurance is one of the popular and simple forms of life insurance. A term plan offers financial protection to your family in case of your unfortunate demise. A term plan is one of the most affordable life insurances because you can get a large amount of life cover sum assured at a low premium.
10 Best-Term Insurance Companies in India
The best-term insurance companies can be determined by one of the crucial factors which is the Claim Settlement Ratio (CSR) provided by the Insurance Regulatory and Development Authority of India (IRDAI) which is a statutory body set up for protecting the interests of the policyholders and regulating it.
Now, let’s have a look at the 10 best-term insurance companies in India and their Claim Settlement Ratios:
| Insurance Company | Total Number of Claims Settled | Total Number of Claims Repudiated |
| SBI Life Insurance | 97.05 | 2.76% |
| Max Life Insurance | 99.34% | 0.66% |
| Bharti Axa Life Insurance | 99.09% | 0.84% |
| AegonLife Insurance | 99.03% | 0.83% |
| LIC Life Insurance | 98.74% | 0.64% |
| Exide Life Insurance | 99.09% | 0.10% |
| Pramerica Life Insurance | 98.30% | 1.51% |
| Kotak Mahindra Life Insurance | 98.82% | 0.84% |
| Bajaj Allianz Life Insurance | 99.02% | 0.93% |
| Reliance Nippon Life Insurance | 98.67% | 1.27% |
Understand the Data Above
- The higher the CSR, the higher the chances that your claims by the insurance companies would be settled. As a benchmark, 80% or above CSR is a good sign and you can buy term insurance from that insurance company.
- The claim settlement ratio of any insurance company is the average of the overall insurance they have sold. For example, if the CSR of a company is 90%, that means out of 100, 90 insured were paid.
- In many cases, pending claims can be put on hold due to many genuine reasons.
- You must opt for older life insurance companies while buying a term plan because, in new companies, early claims are higher. Early claim refers to claiming of life insurance policy within the initial two years and in the case of new insurance companies, people tend to claim their insurance higher hence they have a low claim settlement ratio due to the denial of many claims.
How to Select the Best Term Insurance Company in India?
There are a few factors to consider while buying the best term plan in India:
Claim Settlement Ratio
This ratio shows the total number of claims settled by the insurance company in a financial year. You must check and select an insurance company with a higher claim settlement ratio, also it is one of the important factors to consider.
Solvency Ratio
This ratio of the insurance company indicates the financial capacity of the insurance company if any new need arises. According to the Insurance Regulatory and Development Authority (IRDAI), a solvency ratio of 1.5 is considered healthy. A solvency ratio of 1.5 shows that the insurance company has the potential to pay its long-term liabilities 1.5 times.
Persistency Ratio
This is an indicator that the currently active term plans of the insurance company are receiving premiums persistently. The main aim of this ratio is to understand the healthiness of the cash flow of the insurance company.
Available Riders
Riders act as an extra shield for your term insurance plan as riders extend the coverage for a term plan with an additional premium. Some riders such as accidental death benefits, waiver of premiums, critical illness, terminal illness and hospital benefits. You can select based on your preference if you wish to get additional protection.
Process of Claim Settlement
It is crucial to understand the claim settlement process of insurance companies in India. You must research and find a company with an easy process of claim settlement.
While selecting the best plan for you, you can also use a term insurance plan calculator to determine your premium and the total sum assured.
Why is Claim Settlement Ratio Considered Crucial
The claim settlement ratio is an indicator that shows how many claims are successfully settled out of the total claims requested by the policyholders and that’s why it is a crucial metric while buying a term insurance.
Buying term insurance is fulfilling a financial goal for you and your family and you pay regular premiums to keep the policy active hence you must make sure that the company you are investing your money into, has a strong claim settlement ratio.
Types of Life Insurance Claims
Typically, life insurance claims are of two types, they are:
Maturity Claims
As the name suggests, payment of these claims is made when the life insurance policy matures. This shows that a pre-determined amount will be paid to the insured if they outlive the whole policy term. Moreover, this amount is free of taxes as per the Income Tax Act 1961.
Death Claims
This claim is paid to the nominees of the policyholders which are typically the family members of the insured person. A death claim is settled if the insured person meets with an unfortunate death during the insurance tenure. It is important to notify the insurance company about the death of the insured person to claim the insurance.
Conclusion
Buying a term insurance plan in India is a smart plan to safeguard your family from any financial burden in case of your unfortunate death. Keep in mind that the above-mentioned points help you in buying the best term plan.