Life insurance is almost a necessity in today’s world. You never know what may happen, and it is always better to be safe than sorry. Life insurance will provide your family/ dependents financial aid, and allow them to maintain their lifestyle, should anything happen to you. It becomes all the more important if you are the sole breadwinner for your family.
However, the variety of life insurance plans available in the market may confuse you on which policy to buy. First of all, it is essential to be very clear about your financial objectives before buying an insurance policy. Then, you should assess the current income, as well as present and future liabilities to choose the policy that best suits the needs. Once you’ve done that, you will be sure about what you want from your policy, and how much you can afford to pay as premium.
Many of us tend to choose a policy that offers the cheapest insurance premium amount, however, it is absolutely wrong to only look at this factor. It is critical to assess the claims paid ratio of the insurer too. Even if you buy the most affordable policy, if the experience at the time of claim payment is inconvenient or sour, it defeats the whole purpose. Isn’t it? Comparing the claims payment process of an insurance company is an important part of the process of purchasing life insurance. Here’s why.
Factors to Consider for Insurance Claims Process followed by insurers
There are the following four major factors to be considered:
1. Claim Paid Ratio: The claim paid ratio is the number of approved/ paid claims divided by the total number of claims received. The Insurance Development Regulatory Authority of India (IRDAI) publishes data on claim paid ratio of various companies from time to time. Go through the data to know the claim paid ratio of various companies. Max Life Insurance, for example, has a claim paid ratio of 99.22% for the year FY19-20 as per Annual Audited Financials FY’19-20
2. Turnaround Time (TAT): In insurance, the turnaround time an insurer takes to process a death claim is crucial. A shorter TAT is possible when the insurer’s claim payment process is efficient, the policyholder had made a full disclosure at the time of buying the policy and the nominee has submitted all the required documents on time.
Max Life Insurance offers a proposition of ‘insta-claim service’, which processes the death claims within one day from the claim receipt, subject to the following conditions:
a) Claim amount on all eligible policies is upto Rs.1 crore
b) Claims are for policies that have completed three continuous years
c) All mandatory documents have been submitted before 3:00 PM on a working day
d) The claim does not warrant any field verification
For cases which warrant field verification, Max Life Insurance will pay claim in 5 working days after the receipt of all mandatory documents. Otherwise, Max Life Insurance will pay an interest on death claim amount for every day of delay beyond 5 working days. All claims that qualify instaclaim will be paid within 1 working day from the date of submission of mandatory documents else Max Life Insurance will pay interest at Bank rate as on beginning of financial year in which claim has been received (4.65% p.a. for FY’20-21) for every day of delay beyond 1 working day.
To know more about Max Life Insurance InstaClaim, click on the link below:
3. Claims Guarantee: When a nominee approaches the insurer with a death claim, it is the moment of truth of all the promises made by the insurer. If the insurer fails to efficiently and diligently process the claim request, the nominee has to run to insurer’s office to get the claim and the entire experience is sour. However, there are few insurers who ensure that the claim payment process is smooth for the nominee and travel a mile ahead of others to deliver that promise.
4. Services of a Dedicated Claim Settlement Officer: To facilitate the claim settlement process of life insurance plans some companies have dedicated claims settlement officers. Life insurance companies generally, assign a claims officer dedicated to assisting customers. These officers assist the nominee throughout the claims settlement process taking care of the documentation and procedures to ensure the claim money is smoothly and timely withdrawn by the nominee.
If you are buying a life insurance cover, be sure to research these factors before purchasing.
Click here to know more about the claim process.