The Importance of Claim Settlement Ratio in choosing your insurance plan

The claim settlement ratio is a very important component in all types of life insurance. It is a crucial pointer that indicates the health and the work ethic of a life insurance company. A claim settlement ratio refers to the number of claims a company pays out for every 100 claim requests received. If an insurer has a high claim settlement ratio, it becomes more reputed and trustworthy and vice-versa. So, when you buy any life insurance, whether term insurance plans or whole life insurance plans, you must check the claim settlement ratio of the chosen insurance provider to ensure you stand a fair chance of receiving a claim at the time of a requirement. Read on to know more.

Reasons why the claim settlement ratio is so important

Here are some important reasons that tell you more about the importance of claim settlement ratio in life insurance:

• Speaks about the health of the company:

  Firstly, and most importantly, it speaks about the health of the life insurance company. A company that functions well obviously delivers and this can be determined by looking at the claim settlement ratio. If the ratio is high, it means the company has a good work ethic and gives its customers what it promises when selling the life insurance plan. It also shows that the company is financially stable and in a position to pay out the claim. This speaks volumes about the wellness of a life insurance provider. Hence, you should associate yourself with such an insurer.

• It gives you a claim assurance:

  The ultimate purpose of buying life insurance is to get financial backing when there is a requirement. You buy the life insurance plan in hopes of offering your family the help they need after your demise. But if the claim gets rejected at such a time, it leads to catastrophic results. You cannot come back to mend the issue and your family will be left in a lurch. So, choose the insurer very carefully and get the plan from a company that will surely help your loved ones when you aren’t around to do so yourself. 

• Keeps your family safe:
  

  The proceeds from the life insurance plan keep your family financially safe after your demise. From paying the rent to clearing the loans, the sum assured from your life plan can do wonders for the financial health of your loved ones. However, in the absence of this payout, your spouse, kids, and parents can face tremendous hardships. This is an important reason you must scrutinise the claim settlement ratio of the chosen insurance provider before buying a life insurance plan from them.  

• Makes it a fair and transparent deal:

  A company with a healthy work ethic and financial stability always works in a fair and legal manner. Deals and transactions are always transparent, which helps you have a very smooth and hassle-free experience. You do not have to worry about hidden clauses or missing the fine print; you get what you see.

• Gives you mental peace:

  And finally, when everything is in place, and your family is assured of getting help, you can live a worry-free life. This is a wonderful reason why you must look at the claim settlement ratio of the insurance provider.

Keep these crucial factors in mind and choose a life insurance plan from a life insurance provider that has a high claim settlement ratio. This will assure you and will support your family after your demise, which is quite invaluable.

Your role in the claim payout 

While the life insurance company’s claim settlement ratio is important, you also have to play your part in assuring your family gets the claim payout after your demise. For this, pay the premium on time and keep the policy active.

Also, be very honest when you buy the plan and do not lie at all. Even a small discrepancy at this stage can lead to dire consequences later on, and the claim may even be rejected.

However, please understand that the claim settlement ratio does not guarantee that your claim will be paid. For that, you need to ensure that you have disclosed all material facts at the time of policy inception and have not withheld any relevant details that could affect your claim. So, as long as you fill the proposal form with accurate information, your claim will be duly paid without concern.

Conclusion 

Therefore, it can be safely said that the claim settlement ratio is one of the most important parameters to consider when you look to buy a life insurance plan to protect your family from financial setbacks if something unexpected were to happen to you. Life is very unpredictable, and everything can change in a short span of time. Hence, you need to be prepared for the worst, and getting life insurance is a good way to do it. Choose a life insurance policy from a reputed insurer with a high claim settlement ratio. This will help you achieve the target of life insurance and keep all your loved ones safe.