September 25, 2023

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Why Claim Settlement Ratio Is Important?

3 min read
What Is Claim Settlement Ratio And Why Is It Important While Buying A Term  Plan

Insurance is an essential aspect of financial planning and protection against unforeseen events. When choosing a health insurance provider, it is crucial to consider the claim settlement ratio (CSR), which is the percentage of claims settled by the company out of the total claims received. *

We have compiled important information about claims that can be useful when you purchase a term plan, keeping your best interests in mind: 

What is a claim settlement ratio? 

The percentage of claims that an insurance provider settles in a given year relative to all claims is known as the claim settlement ratio (CSR). It serves as a sign of their reliability. Generally speaking, the insurer is more dependable the greater the ratio.*

On the Insurance Regulatory and Development Authority of India’s official website, you can easily find the CSR of many businesses (IRDAI). #

Why is a claim settlement ratio important? 

  • It ensures your family’s financial stability

Getting life insurance is a great way to ensure financial security in case of unanticipated events. But, if the insurer rejects your claim, the whole objective would be undermined. On the other hand, your family is more likely to experience a straightforward, open, and trouble-free claim process if the insurer pays out the majority of claims. As a result, you may relax knowing that your loved ones won’t have a difficult time receiving the insurance payout. 

  • Highlights the dependability of the insurance 

The claim settlement ratio shows how likely they are to be able to pay you or your nominee the amount guaranteed. Your supplier is unlikely to breach their compensation agreement if they have continuously maintained a high CSR over a sizeable period of time. 

How is a ratio of claim settlement determined? 

This formula is used to determine a CSR: 

The claim settlement ratio (CSR) is calculated as follows: (Total number of claims settled in a year/Total number of claims in a year) X 100

For instance, out of the 10,000 claims for 2019–2020, Company A settled 9,500 of them. Hence, it will have a CSR of 95% (9,500/10,000*100). 

A health insurance premium calculator is a tool you may use online to determine the amount of coverage required based on your needs.

A consistent claim settlement ratio is required 

We have successfully maintained a strong track record in claims settlement for the past ten years. The IRDAI Annual Report includes information on the Claims Settlement Ratio for each life insurance provider. Our ratio is one of the finest in the sector and is based on the number of claims settled. *

These are our historical claim settlement percentages: 

Simple claims processing is required 

Our claims procedure is quite simple. It takes 3 steps to finish: 

  1. Simple Reporting  
  2. Rapid Processing 
  3. Quick Settlement

The claim settlement ratio (CSR) is an important metric for policyholders when choosing a health insurance provider. A high CSR indicates that the insurance company has a good track record of getting claims settled, which means that the policyholders can trust the company to fulfil its obligations in the event of an unfortunate incident. *

On the other hand, a low CSR may indicate that the company has a poor claims settlement process, which can lead to frustration and financial losses for policyholders. It is, therefore, advisable for individuals to consider the CSR of an insurance company before purchasing a policy to ensure that they receive the best possible service and protection. *

Ultimately, CSR provides peace of mind and security for policyholders, making it a crucial factor in the insurance industry. Make sure you compare health insurance plans before you settle on one. *

* Standard T&C Apply

# Visit the official website of IRDAI for further details.

Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms, and conditions, please read the sales brochure/policy wording carefully before concluding a sale.

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