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12% of Life Insurance claims get rejected in India- only LIC is the exception with 97% claim settlement ratio

 LIC is a household name that exudes confidence and trust. The state-owned insurer has the highest claim settlement record in the industry, which gives it an edge over private companies. In 2012-13, the LIC paid out 97.73% of the claims it received. Among private players, only five insurers, including ICICI Prudential Life, HDFC Life, SBI Life, Max Life and Kotak Life, reported a claim settlement ratio of over 90% during this period. Experts say that the insurers who have completed 10 years of operations ought to have a claim settlement record of over 90%. "A high claim settlement ratio indicates that the company pays all genuine claims, which reduces the buyer's worry," says Sunil Sharma, chief actuary at Kotak Mahindra Old Mutual Life Insurance.

 Premium concern

 Given the tremendous brand equity of LIC, the e-Term plan is likely to become the preferred choice for most insurance buyers. - 
 LIC is a household name that exudes confidence and trust. The state-owned insurer has the highest claim settlement record in the industry, which gives it an edge over private companies. In 2012-13, the LIC paid out 97.73% of the claims it received. Among private players, only five insurers, including ICICI Prudential Life, HDFC Life, SBI Life, Max Life and Kotak Life, reported a claim settlement ratio of over 90% during this period. Experts say that the insurers who have completed 10 years of operations ought to have a claim settlement record of over 90%. "A high claim settlement ratio indicates that the company pays all genuine claims, which reduces the buyer's worry," says Sunil Sharma, chief actuary at Kotak Mahindra Old Mutual Life Insurance.However, given the tremendous brand equity of LIC, the e-Term plan is likely to become the preferred choice for most insurance buyers.

 Private insurance companies have received the news with mixed feelings. While many of them have gone into a huddle and refused to comment, others have hailed the LIC move as a positive step that will help grow the category. "We welcome LIC's foray into the online protection segment. This will help grow the online term plan market and enhance the awareness of customers," says Anup Rau, CEO of Reliance Life Insurance. Rau can afford to be optimistic about this new threat from the market leader. The Reliance Online Term Plan has the lowest premium compared with other online term plans for almost all ages (see table). "Price is one of the biggest deciding factors in the online term category, with customers preferring to go with the price leader," says Rau.

Ref:
http://articles.economictimes.indiatimes.com/2014-05-26/news/50099114_1_online-term-plan-reliance-life-insurance-kotak-life

http://economictimes.indiatimes.com/wealth/insurance/analysis/dont-be-lured-by-low-premium-check-companys-settlement-record-too/articleshow/30941956.cms


Comments

Sakhi Sawant said…

Thank you for sharing such great information.It is informative,can you help me in finding out more detail onTerm Insurance Policy,i am interested and would like to know more about this field and wanted to understand the basics of Term Insurance Policy
September 29, 2016 at 4:43 AM
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