The next crucial step is to choose the right insurance company based on its customer assistance, plan benefits, and claim settlement ratio. Here’s are a few terms you need to understand first:

1. What is their Claim Settlement Ratio (CSR)?

Claim settlement is the ratio between the number of claims successfully disbursed by an insurance company and the number of claims they have received in a financial year.

For example, a claims settlement ratio of 98% means that the insurance company has settled 98 out of 100 death claims filed in that particular year. Therefore, higher the CSR, better are the chances of your death claim getting settled.

Also, you need to compare the year-on-year CSR for the insurance company to check if they have been consistent in paying the life insurance claims.

2. What is their Solvency Ratio?

Solvency Ratio refers to the ability of an insurance company to have a sufficient cash flow to take care of its debts.

Thus, you can expect hassle-free claim settlement from your insurance plan if the insurance company depicts a strong ability to meet their short-term and long-term liabilities.

3. How much will the plan cost you?

Each life insurance plan is priced differently. Given the fact that you have to pay the premiums at regular intervals to keep your life plan active; you need to choose an insurance plan that is cost effective. In case the premium is too high and you cannot afford to pay the premium, you may risk losing your life cover.