What do you mean by Insurance Claim Settlement?
Insurance Claim Settlement Ratio is a vital aspect to consider when an investor is planning to invest in an insurance plan. Claim settlement ratio measures the insurance company's reliability when it comes to paying the claims to the investor. Claim settlement ratio can be calculated as the (total number of claims paid by the insurance company/ total number of claims received by the company) X100.
After reading about the claim settlement ratio, let us understand a few reasons why an investor needs to check out the claim settlement ratio of an insurance provider before investing in an insurance plan.
Things to Check Out Related to Claim Settlement Ratio
1. Whether claim settlement ratio of the insurance company is consistent or not?
It is imperative to check whether the IRDA Claim Settlement Ratio of the insurance company is consistent or not. This is because the more consistent the insurance company is settling the claims, the better it is. For example, a company with 90% consistency is better than a company with 60-65% consistency.
2. Assurance of claim settlement ratio being paid
Another reason to check claim settlement ratio before investing in an insurance plan is whether the insurance company provides assurance of paying the claims to the family in case of the investor's death.
3. Documents required for the IRDA claim settlement ratio
To make the process of claim settlement smooth, the investor must make sure that the documents required by the insurance company for settling a claim are handy. Some of the necessary documents include the death certificate of the Life assured attested by the police, medical records, passport-sized photos of the investor, etc.
4. Claim Settlement
As per the rules of IRDA, non- investigative claims should be settled within 30 days by the insurance company. Therefore, the beneficiary should provide all the concerning documents to the insurance company for a smooth claim settlement procedure.
Keeping in Mind the IRDA Claim Settlement Ratio, Which Insurance Company Should One Prefer?
It is recommended to choose an insurance company with an IRDA Claim Settlement Ratio of 80% or above. As these companies are more dependent and reliable as compared to a company with a claim settlement ratio less than 80%.
You should carefully check out the claim settlement ratio of the insurance company before buying the insurance plan. You can verify the data from yearly report published by IRDA.