IRDA Latest Claim Settlement Ratio 2014-15 data : Top 10 Best Life Insurance Companies

Insurance Regulatory Development Authority (IRDA) has released its Annual report for 2014-2015 on 19th January, 2016. Based on the annual report I had listed down Top 10 Best best Life Insurance companies. The criteria for the selection is Claim Settlement Ratio 2014-15.

What is Claim Settlement Ratio w.r.t Life Insurance?

Claim settlement is one of the most important services that an insurance company can provide to its customers. Insurance companies have an obligation to settle claims promptly. For instance, if a life insurance company receives 1000 death claims and settles 950, the claim settlement ratio of that company would be 95%. We can also calculate Claim Settlement Ratio based on benefit/claim amount paid.

Based on IRDA’s annual report I have collated some important points as below;

Life Insurance : Benefits Paid in 2014-15

  • The total amount of benefits paid by life industry was Rs 2,11,180.27 crore in 2014-15 (Rs 2,16,395.63 crore in 2013-14).
  • The benefits paid by the private insurers stood at Rs 67,054.52 crore (Rs 58,380.09 crore in 2013-14) constituting 75.82 per cent of the premium underwritten (75.47 per cent in 2013-14).
  • LIC paid benefits of Rs 1,44,125.75 crore in 2014-15, constituting 60.14 per cent of the premium underwritten (Rs 1,58,015.54 crore in 2013-14, 66.69 per cent of the premium underwritten).
  • The benefits paid on account of surrenders / withdrawals stood at Rs 99700.76 crore, of which LIC accounted for Rs 46,537.61crore and private sector Rs 53,163.15 crore.
  • In the current year, in case of LIC, out of the Rs 46,537.61 crore surrenders, ULIP policies accounted for Rs 23,224.49 crore (49.90 percent) as against Rs 38,967.66 crore (65.35 per cent) in 2013-14.
  • In case of the private insurance industry, the ULIP surrenders accounted for Rs 48,657.89 crore (91.53 per cent) in 2014-15 as against Rs 44,541.11crore (94.18 per cent) in 2013-14.

Life Insurance : Death Claims paid in 2014-15

  • In the year 2014-15, the life insurance companies had settled 8.51 lakh claims on individual policies, with a total payout of Rs 11,788.67 crore.
  • The number of claims repudiated/rejected was 18,231 for an amount of Rs 701.69 crore.

Life Insurance Companies’ Death Claims Settlement Ratio 2014-15 

  • The claim settlement ratio of LIC was better than that of the private life insurers. Settlement ratio of LIC had increased to 98.19 percent during the year 2014-15 when compared to 98.14 percent during the previous year.
  • The percentage of repudiations was 1.15 percent in 2014-15 remaining almost at the same level (1.10 percent) as of the previous year.
  • For private insurers, settlement ratio had gone up by 1.09% at 89.40 percent during the financial year 2014-15 when compared to 88.31 percent during the previous year.
  • The percentage of repudiations for private insurers was at 7.78% in 2014-15 against the 8.03% for 2013-14.
  • The overall industry’s settlement ratio had slightly increased to 96.97 percent in 2014-15 from 96.75 percent in 2013-14.

IRDA Claim Settlement Ratio 2014-15 of Life Insurance Companies pic

How to read above IRDA Claim Settlement Ratio Table?

Let me explain on how to understand the numbers given in the above table. Let us consider Sl.No 1 which has data regarding LIC. During the period 2014-15 the total number of claims (no of policies) received by LIC of India are 7,55,901. This is inclusive of last period’s pending claims (if any) and this period’s (2014-15) claims that are booked or intimated.

7,42,243 policies out of total 7,55,901 policies were settled during the period 2014-15. This translates into a claim settlement ratio of 98.19% for LIC.

The total claimed amount (Benefit Amount) on LIC policies during 2014-15 was Rs 9,480 crore. Out of which Rs 9,055 crore worth of claims were settled.

As per the above explanation LIC gets 98.19/100. So, what happened to 1.81% (100-98.14%) of claims (no of policies)?

These claims fall under the category of claims repudiated or pending or written back. (Repudiated means Claim rejected. Pending are yet to be settled and Written back claims are ‘sent back for more information)

Top 10 Best Life Insurance Companies based on Claim Settlement Ratio 2014-15

CLAIM SETTLEMENT RATIO 2014-15 Top 10 Best Life Insurance Companies as per IRDA Claim Settlement Ratio 2014-15 pic

  1. LIC : In 2013-14 LIC’s Claim settlement Ratio was 98.14%. This is slightly improved to 98.19% in 2014-15.  LIC is the best life insurance company as per claim settlement ratio. LIC had the best Claim Settlement Ratio in 2013-14 too.
  2. Max Life Insurance
  3. Birla Sunlife Insurance
  4. TATA AIA Life Insurance company
  5. Star Union
  6. ICICI Prudential Life Insurance : ICICI Pru life’s claim ratio has fallen slightly from 94.10% to 93.80%.
  7. PNB MetLife
  8. Bajaj Allianz
  9. Kotak Life
  10. HDFC Standard Life : There has been a considerable fall in HDFC Life’s Claim Settlement Ration in 2014-15 when compared to 2013-14 data.

Important Points to ponder upon

  • The claims settlement ratio does not talk about the type of policies i.e., whether the claims that were received are Term or endowment or money back plans.
  • Before buying any type of plan, do look at the company’s Claim Settlement Ratio. But kindly note that Claim ratio is just one of the factors and not THE factor when buying a Life Insurance Policy.
  • Though Claim Settlement record is one of the important factors while choosing your life insurance plan, it is advisable to go for only Term Insurance. You can opt for a Term plan based on the claim settlement record. The other deciding factors can be cost of premium, features, optional riders, quality of service and your comfort level with the Brand. (You may like reading : Top 7 Best Term Insurance Plans).
  • Do not hide any facts while filling the proposal form. This will ensure that your claim (in any unfortunate event happens) is settled.
  • As per the recent amendment to Section 45 of the Insurance Act, If your policy is 3 yrs old, no matter what happens, the life insurance company will not be able to deny the claims. So, your life insurance company has only 3 years in hand to reject the policy based on any mis-representation or mis-statement. Once 3 policy years are completed then the life insurance company has to settle the claims and can not reject them.

Most companies cite incomplete documentation or concealment of facts as a reason for rejecting claims. Hence, while buying a life insurance it is of utmost importance that you furnish accurate information and ensure that all paper work is into place. Give importance to claim settlements record and do not get swayed away by higher returns / tax benefits alone.

Continue reading :

(Image courtesy of Stuart Miles at FreeDigitalPhotos.net)

(Reference : IRDA Annual Report 2014-15)

  • VIKAS J. says:

    CAN THE LAPSED AND TERMINATED INSURANCE POLICY OF ICICI PRUDENTIAL BE ATTACHED TO ANOTHER NEW POLICY OF PNB METLIFE INSU. BEING TAKEN SIMULTANEOUSLY IN VIEW OF SETTLEMENT OF THE SAME WITH ICICI PRUDENTIAL. PLEASE ADVICE, WHETHER IT IS FRAUD OR SCAM ???

    • Sreekanth Reddy says:

      Dear VIKAS,
      What do you mean by attached? Could you kindly rephrase it, unable to understand your query..

  • Ankit says:

    Dear Shreekant
    I m confused to purchase from icici pru or aegon term plan
    I like Aegon features but can we reliey on this for payment when needed

    • Sreekanth Reddy says:

      Dear Ankit,
      As long as you submit the required details in Proposal form (Application form) honestly and accurately, kindly do not worry about claim settlement.

      You may go ahead and buy a term plan from any Insurer of your choice.

      ” As per the recent amendment to Section 45 of the Insurance Act, If your policy is 3 years old, no matter what happens, the life insurance company will not be able to deny the claims. So, your life insurance company has only 3 years in hand to reject the policy based on any mis-representation or mis-statement. Once 3 policy years are completed then the life insurance company has to settle the claims and can not reject them.”

  • Aman says:

    Dear Sir, i want to make Max bupa health companion insurance policy.. should i consider max life claim settlement ratio for max bupa.. have these two same CSR?

  • Naveen says:

    Hi Srikanth,

    Iam at 40,Can I go ahead with this term plan->AEGON Life iTerm Plan and tell me whether it covers accidental death and permanent disability.

    I do have traditional Jeevan Anand,Can I discontinue Policy.

    Please Suggest me.

    Regards,
    Naveen.

  • Himanshu says:

    Hi Shreekanth,

    Really insightful article. I am planning to buy term insurance around 1 Cr for 30 years…and shortlisted 2-3 companies…ICICI iProtect, HDFC Click2Protech and Max Life Online….

    Out of 3, Max Life has least premium and good CSR…so inclined towards Max Life….
    Please note that Max Life has 93% of CSR (%of Benefit) where as HDFC has only 65%…..

    I have couple of questions if you can please reply:

    1. There is a merger plan between Max Life and HDFC. Can we expect same CSR (% of Benefit) of Max Life after merger or it could be decreased significantly….Also, There is around 3 to 4 thousand of difference between premium of both. Is it good opportunity to buy Max Life and later (after merger) enjoy brand name – HDFC?

    2. We are considering CSR as of now…but what is guarantee that same CSR will be there after 5 years….

    3. Should we give importance to CSR (% of Benefit) ?

    4. I dont see any difference in buying policy from Insurance company’s online portal and Policybazaar/myinsuranceclub etc….any idea why?

    PS: Thanks for repeatedly mentioning about Sec 45 of the act…I personally checked at IRDA site and its 100% true….

    Regards,
    Himanshu

    • Dear Himanshu,
      1 – Merger has been approved but may take some more months for it to happen.
      2 & 3 – As you are aware of Sec 45, kindly go ahead and buy a term plan from a company of your choice. Kindly disclose all the required info in the proposal form.

  • Zaheer says:

    Hi Sreekanth,

    Im zaheer , 33 years young.

    i want to take a pure term insurance with some riders.
    i short listed few,
    1. ICICI pru
    2. HDFC C2P
    3. birla sunlife

    please suggest a best company for me to sign up. Im particularly interested in birla Sun life as they give all riders with minimum premium. Please tel me more about birla Sun life . Thanks

    Zaheer

  • sumit kumar says:

    Hye Sreekanth Reddy
    Myself Sumit Kumar, aged 36 years, Male, having widow mother, wife, three children fully dependent upon me. I have one LIC Plan “Jeewan Saral” the premium of which is Rs.1500/- per month. I want a plan which would help my family in case of any mis-happening. I can pay monthly premium of Rs. 500/- to 800/-. Kindly suggest the cheat and best plan as per my paying capacity.
    Regards
    Sumit Kumar

    • Dear Sumit,
      You have to consider taking a Term insurance plan at the earliest.
      Once you buy it then you can discontinue the existing lic policy. You may also consider buying a Personal accident insurance plan.
      Kindly read:
      Best term insurance plans.
      How to get rid off unwanted life insurance policy?
      Traditional life insurance plan – a terrible investment option.
      Best Personal accident insurance plans.

      • SUMIT KUMAR says:

        Hello Sreekanth Sir,
        Thanks for your kind assistance on my query.
        Sir, I want to know which company’s term plan is best one. As you guided me to take term insurance first and then to discontinue the existing policy. The premium of my existing LIC Jeewan Saral Plan is Rs. 1500/- per month. I want to know that if I stop my existing plan premium i.e. Rs.1500/- per month and pay Rs. 500/- more i.e. Rs. 2,000/- in total, then in which manner I should utilized this Rs. 2000/- for term plan and for some saving. Plz guide me.
        Regards
        Sumit Kumar

        • Sreekanth Reddy says:

          Dear Sumit,
          You may a term plan from a company of your choice and based on your affordability (premium rate).
          Kindly calculate the premium that is applicable for the selected term plan and the savings (if any) can be directed to mutual funds or any other suitable investment avenues for your other financial goals.

          • SUMIT KUMAR says:

            thanks Sreekanth for your valuable time.
            I decided to buy a term plan for an amount of Rs. 30 Lacs for 30 years tenure from LIC that too off line because of its claim settlement ratio. Is my decision is correct as per my liabilities?
            If I got the term plan from LIC then is it possible or advisable to get another term plan from private company like MaxLife for an amount of 15 or 20 lacs as the premium of said company is very low. Or should I can take some another step.

          • Sreekanth Reddy says:

            Dear Sumit,
            Offline or Online – regarding claim settlement- does not really matter.
            You can buy multiple term plans, there is no restriction (subject to acceptance of your proposals by the insurance companies).

  • TS Kumar says:

    Hello Srikanth,

    Thanks for your valuable time in sharing the knowledge. I want a better future with proper financial planning and need your suggestions on it.

    My age: 30, Single(will get married in a year), parents are not dependent on me (but I wish to take care of them in future)
    Residing country: Singapore (Planning to come back in 1-2 yrs and settle down in Hyderabad
    Heath status is good, non smoker & non drinker
    Health insurance: Yes. 3Lakhs (provided by my Employer) + 2L top-up by me and no other health coverage

    Goal: Own a 3BHK house[40-50L] & car in hyderabad and settle down
    Planning Monthly investment: 15-20K

    Below are my current investments, FD, Insurance plans. Please let me know the best ways for investment and alterations needed from present investments. I’m open to take term & health insurance and to invest money in mutual funds/SIPs/Equities

    Sal: 12L (in India if I come back)
    Current Sal: 2.5L per mon (in SNG) can save 1L
    Total FDs: 15L
    RD: 10K in progress
    Insurance policies:
    1. Birla sunlife VISION plan, 30yrs, 20L sum assured(Guanrranteed survival benefit 35L), 30 Yrs, policy taken 5 yrs back, hospital rider 2L
    2. LIC of India Jeevan mitra triple cover, 30yrs, 5L sum assured, policy taken 5yrs back
    3. Exide life creating life child plan, 16yrs, 1.8L sum assured, policy taken 5yrs back

    Need your valuable suggestions.. Thanks in advance.

  • Babu Rajesh says:

    I am 42 years old, NRI, working in Oman. I have taken an online
    term policy from Max Life insurance recently when I was in India
    for my annual leave.

    As I am pre-diabetic and taking oral medication, I have disclosed
    my health factors sincerely in my proposal form. Even though
    my medical examination results were normal, I have been asked
    to pay an extra premium @ 50% based on my health declaration.

    Now, I came to know that the Max Life Insurance company will
    be merged with HDFC Life within an year and the policy will be
    serviced by HDFC Life thereafter.

    As you are aware, Max Life is having a CSR of 96.2% and the
    claims pending for more than 3 months are only few with them.
    Where as HDFC Life’s CSR is only 95% and they have more
    than 250 claims pending with them for more than 3 months.

    Based on the above facts only, many people decided to choose
    Max Life as their preferred life insurance partner. However, more
    than 75 lakhs policy holders of Max Life are now going to be taken
    over by an insurance company with lower CSR.

    In current market scenario, merger can happen between any
    private insurers in India, in accordance with the regulations of
    IRDA. But what will be the consequences to be faced by the
    policy holders in such corporate consolidations.?

    Can I expect to continue with the same kind of quality treatment
    and policy contract after the merger of these companies.? Is there
    any regulation by IRDA to protect the interest of policy holders in
    such mergers.?

    Expecting your valuable comments.

    • Dear Babu,
      Kindly do not get worried. Even HDFC is a standard company and our Indian Insurance industry is a very well regulated one.
      If one discloses all the required information in the proposal form honestly (life the way you have done), there is nothing to worry about claims being serviced. Also, kindly note that we do not have separate claim settlement data w.r.t Term insurance plans alone.

      “As per the recent amendment to Section 45 of the Insurance Act, If your policy is 3 yrs old, no matter what happens, the life insurance company will not be able to deny the claims. So, your life insurance company has only 3 years in hand to reject the policy based on any mis-representation or mis-statement. Once 3 policy years are completed then the life insurance company has to settle the claims and can not reject them.”

  • Suresh Bhati says:

    Hi Sreekanth,

    I have a two policy 1.LIC Jeevan Chaya commencement from 2009 other is TATA AIA commencement on 2003 it’s possible I can slender both the Policy if Possible please let me know and what is the steps I have to follow

  • DEEPAK GORA says:

    Hello sir,

    I appreciate the knowledge shared on this blog for investments & insurance.

    Just need to know one thing.. I’m going for a 1 crore term plan for 30 years cover from Max Life.

    My age is 24 & i’m unmarried. But have my mother as a dependent.

    I checked the info on this plan & found it be in good books of IRDA. Pl suggest if its worth, based on ur knowledge & experience.

  • Leo Joseph says:

    Hi Srikanth, I am 38yrs old and I have taken ICICI Ismart in Apr/2016 (it is just few months old) and the cover is 1Cr. I would like to know if I can reduce the cover from 1cr (current cover) to 50 lakhs so that the premium will less next year.

    Regards
    Madhukar

    • Dear Leo,
      You can forward a request for reduction in Sum Assured to the concerned branch/servicing office in writing. Your premium would be reduced proportionately. Whether your request is accepted or not, depends on the policy terms & conditions. Kindly contact icici pru customer care.

  • Arbind says:

    Dear sir
    I want to buy a term insurance of 1 crore. Icici provid 40 yrs lic gives 35 yrs my age is 29
    And my dependents are not so smart and educated
    And i am confused between lic or icici which company provides easy money to my dependents in my absence.
    Plz help me

  • Kishor Venkatesh M says:

    Hello Sir,

    I am impressed with your blog. your blog is really giving relaxing to users.
    I am 28, yesterday i took max bupa health companion insurance plan for Rs 5lac premium 5420/-
    I want to take term insurance and i want to start investing also. please show me right path.
    what is the need of personal accident insurance

    Make me RELAKHS

  • Rochak says:

    Hi Sreekanth,

    As per my analysis, I am planning to buy a pure term plan of 1 cr. from ICICI Prudential and Max Life of 50 Lakh each that will give me a freedom of premium, good facility and services and flexibility to stop anyone if not required. Also the total premium cost will be low in comparative to commutative one if buying from same vendor (except total Max Life)

    Would you think this approach is good? Do you think any other brand(s) can provide best services for 1 cr. term plan in absence to my family?

  • Tanmay says:

    Hello Sir,

    I have taken Birla Sunlife Dream Plan Enhancer policy in jan 2008 with 20 yrs maturity and till date have deposited Rs.90000. But now i want to discontinue this policy.
    Please guide me as to what should I do.

    Thank you

  • Manish says:

    Hi Sreekanth,

    I am a big fan of your articles. I am an IT professional and working for a MNC in Delhi.
    I am sharing my investment to you and please let me know is there any more investment required or it is sufficient for my life ? My annual income is 6LPA.
    LIC (Jeevan Anand) – 7 Lac
    Term Insurance (HDFC Click2Protect) – 1 Cr
    Personal Accident (HDFC Ergo) – 16.5 Lac
    Personal Accident (ICICI Lombard) – 10 Lac
    Health Insurance (ICICI Lombard) – 5 Lac

    Thanks in advance,
    Manish

  • Ramesh says:

    Hi Sreekanth,

    I am 27 year old , currently working with a MNC. I am looking for some term insurance plan, which cover both accidental or natural death. i am a non-smoker category person.
    I have only a LIC 165(Jeevan Saral)policy currently.
    Please advise which insurance policy will be suitable for me if I am looking for cover of 1CR.

    Regards,
    Ramesh

  • Amol says:

    Hi Sreekanth

    I was looking for a term plan particularly to make sure that my childs future education is secured.
    I am looking for term insurance of 1 cr.
    I see that the pnbmetlife has a plan where they provide a monthly compensation till child attains 21 and if no unfortunate event happens by child attains the age of 21 then the entire insurance amount is paid as lump sum.
    Cqn u tell me if this is a good plan to go for and considering all ratios etc what is your overall take on pnbmetlife as a insurer

  • Bala says:

    Hi,

    I have an offline term plan from LIC for 50 Lakh and online term plan from Aegon for 70 Lakh?

    Can I switch to online term plan of LIC or any other providers from the offline LIC policy?

  • Jairam says:

    Hi sreekanth.
    I am a govt officer and my yearly income is approx 3.2 lakh.I want to get term insurance of 2 crore sum assured of LIC e-term insurance. Is it possible? I am two year old in service.please(age 31 year)

  • Anil says:

    Dear Sir, I am really impressed by knowledge shared by you and really appreciate this. I am evaluating term policies offered by various companies and seek your opinion on Permanent disability rider. Does it really benefits. In what condition it applies. Kindly guide. Thanks

  • chandrakantsinghchauhan says:

    you are my TEACHER for financial planing thank you sir

  • RAJESH KUMAR says:

    DEAR SIR I HAVE TAKEN A ONLINE TERM INSURANCE OF SBI E-SHIELD OF FIFTY LAC FOR 30YEAR @7000P/A . IS IT GOOD ? AND WHAT IS CLAIM RATIO FOR THIS PRODUCT?

  • Mayank says:

    Hi Sreekanth,

    I am 26. Planning to buy 1 Cr, 40 years PNB Metlife term plan in a monthly premium of Rs 710. Cost and tenure is best in industry. Do u suggest buying PNB METLIFE or any other brand?

    Thanks!

  • feroz says:

    Hi Sreekanth,Thank you so much for the information

    plz send Term insurance Claim Settlement Ratio 2014-15

  • Somasundaram says:

    Hi Sreekanth,

    I am confused with Insurance products ,after reading your post i understood the insurance policies especially term insurance. Really amazing. Doing a very good job regarding financial planing and Insurance.
    keep it and all the very best. Thanks.

  • M Manjunatha says:

    Hi Sreekanth,

    Thank you so much for the information provided, can you please if possible clarify the below required details.
    details of claims repudiated or pending or written back for LIC .

    • Dear Manjunatha,
      Here are the details;
      No of policies repudiated by LIC in 2014-15 : 8,689
      Claims written back by LIC during 2014-15 (no of policies) : 1,317
      Claims pending (no of policies) : 3,652

  • >
    Scroll to Top