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August 11, 2020

Term Insurance Claim Settlement: Everything You Need to Know

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Buying an online term plan in India is one of the most crucial investment decisions. Having an online term plan will pay off not just right now but also long after you are gone. It is a financial security that you give to your loved ones by promising them a comfortable life, even in the face of any eventuality. Besides, an online term plan is not just a step towards long-term savings, but it also provides financial benefits through various stages of life.

However, buying online term plan in India requires a bit of research. But the one thing that you must check when choosing an insurer is the claim settlement history.  
You know why? Because what good is an online term plan if it does not reach your family members when they need it the most? This is why you need to choose an insurance provider only after careful evaluation of factors like claim settlement ratio, claim benefits, and settlement process. 

Importance and features of Claims Settlement 

From a policyholder’s point of view, the benefits of online term plan are only worthwhile if the insurer has a streamlined claim settlement process in place. The whole point of an online term plan is to give financial support to the family when its due. Therefore, it is essential that your grieving loved ones can receive quick and hassle-free sum assured in case of a misfortune. In addition to speed, the entire process, from claim application to receiving the payment should be seamless, convenient, as well as transparent. 
Here are some features of the claims process that you should keep in mind when choosing an online term plan. 

1) Check the claim settlement ratio published every year by the Insurance Regulatory and Development Authority. For example, Max Life has a claim settlement ratio of 98.74%, which is computed based on individual claims settled over total claims filed for the financial year.

2) The claim settlement ratio should be consistent. A reliable insurer will maintain a solid claim settlement track record

3) The claims process should have simple steps that include easy reporting, quick processing, and fast settlement

4) Claims should be processed quickly and transparently

Evaluate Claim Handling Process to Choose the Insurer


Image source: Shutterstock

An online term plan must be purchased based on premium outgo and expected returns after the passing of the insured. This pay-out will help your loved ones move on with their lives after a devastating loss. 
It is, therefore, imperative that you check the claim settlement process before purchasing an online term plan in India. The insurer should follow these steps for a hassle-free process: 

Step 1: Understanding and reporting the claims

The claim process can be initiated by sending a written request to your agent advisor or by visiting your insurance provider’s nearest office. You can also send them an email. The claim must be intimated at the earliest after the demise has happened. In the case of critical illness claims, claims must only be intimated after the end of survival period of at least 28-30 days. It should be easy for the policyholder to reach out to their insurer and file for claims with ease.  

Step 2: Faster Processing

The insurance provider should provide the fastest and the fairest claim settlement process in the friendliest manner. When you file for your claim, a dedicated relationship officer is assigned to each case to help the claimants at every step of the process. A team of experts will ensure that all claims are released within 30 days of receiving the claim request. The insurer should aim for a lesser turnaround time for claim settlement. 

Step 3: Settlement

Check the documentation requirements as per your policy and submit them to the claims processing department of your insurance provider. Make sure you have the requisite originals as well as attested copies as mentioned in the policy. The nominee would be required to present the documents to file a claim. According to the regulations, all claims must be settled within 30 days of receiving the necessary documents and clarifications. 
Once you have done all the steps, wait patiently for the sum assured to be disbursed as per the insurer’s policy. Be sure to check the claim settlement ratio of the insurance provider before investing in a plan with them. 
It is safe to say that the claim settlement ratio is a real benchmark to determine an insurer’s reliability. It helps to identify if the provider pays the beneficiary the death benefit amount as promised. Besides, a higher claim settlement ratio means that there is a good possibility that your future will also be settled by the insurer properly. 

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