Term Insurance Plans And Their Claim Settlement Ratios

Term insurance plans and their claim settlement ratios

A term insurance plan is the simplest form of life insurance. It gives you the promise of payment of a fixed benefit in case of death during the term of the plan. Term insurance provides coverage for premature death of the breadwinner of the family.

When you invest in a term insurance plan, you are secured that if anything happens to you, your family will not suffer financially as the plan would give them a financial corpus to tide over the difficulties. Given the security that term plans give, they are considered to be the most important investment which you can do for your family’s security.

Features of term insurance plans:

Term insurance plans are quite different from other types of life insurance plans. They have some unique features which include the following –

  1. Since term plans are the cheapest, you can choose high levels of coverage without worrying about the premium
  2. There is no limit on the sum assured amount that you can choose.
  3. Term plans offer long coverage durations
  4. There is usually no maturity benefit under term plans
  5. You can opt for different types of term insurance plans as the plans are available in the following variants-
    1. Increasing term insurance – under this variant the sum assured increases every year
    2. Decreasing term insurance – under this variant the sum assured decreases every year
    3. Return of premium plans – under this variant the premiums paid are returned back if the plan matures
    4. Level term insurance – under this variant the sum assured remains the same throughout the policy period
  6. Term insurance plans do not earn a bonus. You get the sum assured only as a death benefit.

Term insurance claim settlement ratio

Before buying a plan you should always check the term insurance claim settlement ratio. The ratio shows the percentage of claims that the insurance company has paid vis-à-vis the total claims which were made upon it. It is calculated as follows –

Claim settlement ratio = Number of claims settled / total number of claims made * 100

The ratio is represented as a percentage and the higher the term insurance claim settlement ratio is, the better would be the plan. This is because a high ratio improves the chances of your term insurance claims being settled. Different insurance companies have different term insurance claim settlement ratios. You should, therefore, compare the ratios when comparing term insurance plans so that you can increase the chances of your claim settlements.

Best term insurance plans in India

There are a number of Term Insurance Plans available in the market and choosing the best plan whose term insurance claim settlement ratio is also high might prove difficult. So, to make your work easier, here is a list of some of the best term insurance plans available in the market which also boast of having a high claim settlement ratio –

  1. LIC’s Jeevan Amar Plan:

    LIC boasts of having the highest claim settlement ratio in the industry and its term insurance plans are among the best. Here are the salient features of Jeevan Amar plan –

    • You can choose either level sum assured or increasing sum assured option under the plan
    • Premiums can be paid at once, for a limited time or regularly
    • You get premium discounts for choosing the high sum assured levels

      Important parameters of LIC’s Jeevan Amar Plan

      Entry age 18 to 65 years
      Plan term 10 to 40 years
      Sum assured INR 25 lakhs onwards
      Term insurance claim settlement ratio for Financial Year 2017-18 98.04%
  2. Aegon Life iTerm Insurance Plan

    This is an online term plan which is offered by Aegon. The plan has the following salient features –

    • There are three different options for coverage. You can even choose the plan to cover you till 100 years of age
    • Terminal illness benefit is inbuilt in all coverage options
    • There is also an optional rider for better protection

      Important parameters of Aegon Life iTerm Insurance Plan

      Entry age 18 to 65 years
      Plan term 5 to 82 years
      Sum assured INR 25 lakhs onwards
      Term insurance claim settlement ratio for Financial Year 2017-18 95.67%
  3. HDFC Life Click 2 Protect 3D Plus Plan

    This is quite a comprehensive term insurance plan which has the following salient features –

    • This plan offers you a choice of nine coverage options to choose from
    • Inbuilt riders are available under many coverage options
    • You can choose the premium payment term as per your suitability

      Important parameters of HDFC Life Click 2 Protect 3D Plus Plan

      Entry age 18 to 65 years
      Plan term 5 years to whole life
      Sum assured INR 10,000 onwards
      Term insurance claim settlement ratio for Financial Year 2017-18 97.80%
  4. TATA AIA Life Sampoorna Raksha Plan

    This plan also offers you flexibility in choosing your coverage. It has the following features –

    • There are four death benefit options from which you can choose
    • You can extend the coverage up to 100 years
    • You get attractive premium discounts which make the premiums more affordable

      Important parameters of TATA AIA Life Sampoorna Raksha Plan

      Entry age 18 to 70 years
      Plan term 10 years to whole life
      Sum assured INR 50 lakhs onwards
      Term insurance claim settlement ratio for Financial Year 2017-18 98%
  5. ICICI Pru iProtect Smart Plan

    You can buy this plan online and the plan has the below-mentioned features–

    • The premiums are extremely affordable
    • You can enjoy coverage till 99 years of age
    • Optional critical illness rider is available which covers you against 34 major illnesses

      Important parameters of ICICI Pru iProtect Smart Plan

      Entry age 18 to 65 years
      Plan term 5 years to whole life
      Sum assured Depends on the minimum premium which is INR 2400
      Term insurance claim settlement ratio for Financial Year 2017-18 97.88%

      Here is a complete list of life insurance companies currently operating in India along with their published Claim Settlement Ratios for the financial year 2017-18 –

      Name of the life insurer Claim Settlement Ratio
      Life Insurance Corporation of India 98.04%
      HDFC Life Insurance Company Limited 97.80%
      Max Life Insurance Company Limited 98.26%
      ICICI Prudential Life Insurance Company Limited 97.88%
      Kotak Mahindra Life Insurance Company Limited 93.72%
      Aditya Birla SunLife Insurance Company Limited 96.38%
      TATA AIA Life Insurance Company Limited 98%
      SBI Life Insurance Company Limited 96.76%
      Exide Life Insurance Company Limited 96.81%
      Bajaj Allianz Life Insurance Company Limited 92.04%
      PNB MetLife India Insurance Company Limited 91.12%
      Reliance Nippon Life Insurance Company Limited 95.17%
      Aviva Life Insurance Company Limited 94.45%
      Sahara India Life Insurance Company Limited 82.74%
      Shriram Life Insurance Company Limited 80.23%
      Bharti AXA Life Insurance Company Limited 96.85%
      Future Generali India Life Insurance Company Limited 93.11%
      IDBI Federal Life Insurance Company Limited 91.99%
      Canara HSBC OBC Life Insurance Company Limited 95.22%
      Aegon Life Insurance Company Limited 95.67%
      DHFL Pramerica Life Insurance Company Limited 96.62%
      Star Union Dai-ichi Life Insurance Company Limited 92.26%
      IndiaFirst Life Insurance Company Limited 89.83%
      Edelweiss Tokio Life Insurance Company Limited 95.25%

    (Source: https://www.basunivesh.com/2019/01/18/latest-irda-claim-settlement-ratio-2017-18/)

    You can choose any of the above-mentioned term insurance plans and you would be assured of high claim settlement ratios. While the plan would give you a comprehensive scope of coverage, the high term plan claim settlement ratio would ensure that the claims are settled easily. So, invest in the best term insurance plan and gift financial security to your family.

Frequently Asked Questions:

  1. Is there any benefit that I can get if I surrender my policy?

    No, there is no surrender benefit under term insurance plans.

  1. How can I buy the best term insurance plan?

    To buy the best term insurance plan, you can visit www.turtlemint.com. Turtlemint is an online platform which is tied up with all the leading life insurance companies. You can visit Turtlemint to compare and find the best term insurance plan for your coverage needs which also has a high claim settlement ratio. To buy a term plan through Turtlemint, follow these steps –

    • Visit the website and choose ‘Life’
    • Then choose ‘Term Life Plans’
    • You would then have to provide your details like your gender, marital status, birth date, annual income, smoking preference, the sum assured that you want and your contact details
    • You would then be shown a list of the best term plans
    • You can compare the plans and buy the best one.
  1. What type of premium discounts are allowed under term insurance plans?

    Term plans offer premium discounts if you don’t smoke and if you choose a high sum assured level. Some plans also allow a discount for paying the premiums annually.

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