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Which is the Stylish Life Insurance Company in 2023?

Which is the Stylish Life Insurance Company in 2023?

You want to buy a term life insurance plan. How would you select a life insurance company? You would want to go with the “ Stylish Life Insurance Company ”. Wouldn’t you?
And for that, the utmost of us would look at the claim agreement rate of the colorful insurers. Advanced the better. IRDA lately released the periodic report for FY2020- 2021, where it participated in the claims agreement data for all the life insurance companies in India. This makes your task relatively easy, doesn’t it? That’s right but you need to concentrate on the right claim agreement rate too. Let’s first understand what the claim agreement rate means.

Claim agreement rate by Number

This is the number generally stressed by life insurance companies. You can anticipate figures closer to 98- 99. What does this number mean?
still, the claim agreement rate is 990/1, 000 = 99, If the life insurance company receives 1000 death claims in a time and it pays 990 of those claims.
As simple as that. easily, advanced the claim agreement rate( by number), the better it is.

Claim agreement quantum by Benefit quantum

Statistics frequently hide further than they reveal. What if the insurance company is rejecting death claims in term insurance programs more? As a prospective term insurance buyer, does this not interest you? It should.
Let’s say so, of the 1000 claims, 950 claims were from traditional life insurance plans or ULIPs with an average claim quantum of Rs 5 lacs.
Only 50 claims were from term life programs with an average claim quantum of Rs 1 crores. For the sake of simplicity, let’s consider all programs were of Rs 1 crore.
The life insurer settles all the 950 claims under traditional plans and ULIPs. And rejects 10 out of 50 claims in term insurance plans.

The claim agreement rate by number is still 99. The insurance company paid 990 out of 1000 claims.
But 20 of term life insurance claims were rejected. You wouldn’t be keen on such a company, right?
easily, you would go with a company where a death claim agreement is advanced for term life insurance programs. But there’s a problem. similar data is NOT available.
IRDA( or the insurance companies) doesn’t give policy category-wise for claim agreement data i.e. you can’t figure out whether term insurance plans face an advanced rate of rejections. The data is participated only on a consolidated base( for all types of life insurance programs). Now, you know that claim agreement figures reported by life insurance companies aren’t dependable. At the same time, you don’t know anything about claim agreement rates for term life insurance plans. What can you do? Fortunately, you have a deputy. IRDA reports claim agreement data by benefit quantum too.
For case, the IRDA periodic report shares the total quantum of claims entered, the quantum of claims, rejected and pending. Using this, we can find out the claim agreement by benefit quantum.
Continuing with the below illustration
1000 death claims entered.
950 claims under traditional plans or ULIPs Average claim of Rs 5 lacs. All settled.
50 claims under term life insurance plan Rs 1 crore each. 40 settled. 10 rejected.
Total quantum of claims = 950 X 5 lacs 50 X 1 crore = Rs97.5 crores
Total quantum of claims settled = 950 X 5 40 X 1 crore = 87.5 crores
Now,87.5 crores and97.5 crores are mentioned in the IRDA report( not policy order-wise agreements)
Claim agreement rate by benefit quantum = 87.5 crores/97.5 crores = 89.7
This is relatively removed from 99 reported when looking at an agreement by number.
still, concentrate on both figures, If you’re looking to buy a term life insurance plan.

  1. Claim agreement rate by the number of claims
  2. Claim agreement rate by benefit quantum
    You would want the insurance companies to rank well on both parameters. Let’s see how colorful insurance companies fare.

I’ve sorted the data grounded on the number of claims entered. In the table below, I partake the average size of settled and rejected claims.
You can see the average size of rejected claims is much bigger than the average settled claim. This tells that advanced value programs similar as term life insurance plans are more likely to be rejected.

Unless you have a preference for any life insurance company or brand, you should go with a company that ranks well on both claim agreement rates. 98 or over in the claim agreement by number. 95( or at least 90) or over in the claim agreement rate by benefit.

Why the Claim agreement under Term Life Insurance programs Is Lower?

Term insurance programs are generally high-value programs and the pay- eschewal from an insurer’s fund is much more advanced in the case of a term life insurance plan. Hence, they’re likely to probe term plan claims deeply. That itself increases the chances of rejection( due to non-disclosure, fraud, etc).
By the way, we can’t just put the blame for advanced claim rejections in term plans on life insurance companies. However, they’re likely to buy term insurance plans, If the guests have an intention of misleading insurance companies. And this would make life insurance companies probe term life insurance claims deeply.
also, should we give the benefit of mistrustfulness to the insurers with low claim agreements by benefit quantities? After all, the insurance companies are fully entitled to reject insurance claims on grounds of non-disclosure of material information and fraud. I don’t suppose so, especially if this trend has continued

numerous times. This is for 2 reasons.

  • It’s unreasonable to assume that the guests are lying to or hiding information from only many insurance companies. Hence, insurers with low claim agreements by quantum can not hide behind the reason for the fraudulent intentions of guests.
  • A lower agreement by benefit quantum suggests misspelling on the part of insurance companies or their agents. Advanced misselling would lead to advanced rejections. I’m apprehensive of numerous cases where insurance company tele- directors encouraged buyers not to expose health conditions.
  • This reflects on the claim agreement culture of the companies.
    Section 45 of the Insurance Act 2015 Provides Protection

still, your life insurance claim can not be rejected, If your life insurance policy is over 3 times old. Since this is mentioned in the Act passed by the Parliament of India, the insurance companies have little latitude in this. The insurance companies must pay death claims for life insurance programs over 3 times.
still, don’t take this as a reason for hiding aspects of your health for 2 reasons.

  1. Demise can be before completion 3 times( and the insurance company can fluently reject a claim for disclosure of material information).
  2. Indeed if demise happens after 3 time, insurance companies can find some loopholes and reject claims. Your family can go to IRDA but the insurance controller is relatively effete and useless. Your family will have to go to court and we know that can be inconvenient.
    You must flashback that you won’t be around to challenge the insurer’s claims about non-disclosure or fraud. Your family will face the mass. The recorded lines are only accessible to insurance companies. How does your family contest what you bared or didn’t expose on recorded lines? That’s why it’s important not just to expose your health conditions at the time of policy purchase but also to ensure that similar information is considered by the underwriting brigades.
    still, do partake the same information with the insurance company over a dispatch too, If you partake any medical information on “ recorded lines ”. Mark a dupe to a family member too.

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