In the modern society, life Insurance is nearly a requirement. Because nothing is guaranteed, it is always preferable to be safe than sorry. Should something happen to you, life insurance will give your family and dependents financial support so they may carry on with their way of life. If you are the only provider for your family, it becomes much more crucial.
Many of us have a tendency to select a policy that offers the lowest insurance premium amount, but it is incorrect to base your decision just on this aspect. It is crucial to evaluate the insurer's claims Paid Ratio as well. Even if you choose the cheapest coverage, the entire objective is defeated if the claim payment process is inconvenient or unpleasant. Is it not? When buying life insurance, it's crucial to compare how different insurance companies handle claims payments.
The 4 major factors that insurers take into account while processing insurance claims
1. Claim Paid Ratio: The claim paid ratio is calculated by dividing the number of claims that were approved and paid by the overall number of claims. The Insurance Development Regulatory Authority of India (IRDAI) periodically releases information on the claim-paid ratio of different businesses. Examine the information to learn about the claim payout ratios of various companies. According to the audited financials for FY'22-23, Max Life Insurance, for instance, had an individual death claim paid ratio of 99.51% for the fiscal year 22-23.
2. Turn Around Time (TAT): The amount of time it takes an insurer to process a death claim is very important in insurance. When the insurer's claim payment procedure is effective, the policyholder made a full disclosure at the time of purchasing the policy, and the nominee has timely submitted all necessary paperwork, a quicker TAT may be achievable.
Few Insurance companies provide the following restrictions for its "instant-claim service," which handles death claims within one day of the claim's receipt:
a) The maximum claim amount for all applicable policies is Rs.1 crore.
b) Claims relate to policies that have been in effect for three consecutive years.
c) On a business day, all required documents were turned in before 3:00 PM.
d) No field verification is warranted for the claim.
3. Claims Guarantee: All of the guarantees provided by the insurer must stand up to scrutiny when a nominee approaches them with a death claim. The nominee must rush to the insurer's office to pick up the claim if the insurer does not promptly and diligently handle the claim request, and the entire experience is negative. A select few insurers, on the other hand, go above and beyond to keep their promise of making the nominee's claim payment process simple.
4. Services of a Dedicated Claim Settlement Officer: Some businesses offer specialized claims settlement officers to make the claim settlement process for life insurance plans easier. Typically, life insurance firms designate a claims officer who is solely responsible for helping clients. These officers support the nominee throughout the claims settlement process, taking care of the paperwork and formalities to guarantee that the nominee can withdraw the claim money smoothly and on schedule.
If you're considering a life insurance policy, make sure to look into these things first.
Conclusion:
However, the wide range of life insurance plans on the market may leave you unsure of which coverage to choose. Before purchasing an insurance policy, it is crucial to be crystal clear about your financial goals. Then, in order to select the policy that best meets your needs, you need to evaluate the current income as well as the present and future liabilities. Following that, you will be certain of what you want from your policy and how much you can afford to spend on premiums.
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