Best Life Insurance provider in India – based on Claim Settlement Ratio

Deciding which company to choose for Life Insurance has always been tough and with so many new entrants customers are spoiled for choice. It’s always a dilemma which factors to look at while choosing your life insurance provider – cost, convenience, past performance, claim settlement rate, etc.

I think the most important factor should be tension free claim settlement for your loved ones once you are not there.

And in that case the recent Annual Report (2008-09) from IRDA shows LIC (Life Insurance Corporation) tops the chart. It has claim settlement rate of 95%, which is 5% higher than its nearest competitor Max New York Life with 90% settlement rate. But if you have a look at the premium rates for term plans LIC generally has the highest rate.
So in all you can think of LIC as a costly but still the one with most hassle free settlement for your insurance.

The other thing I could see is Companies with higher number of settled claims have a bit lower claim settlement rate in terms of amount which means that low value claims are settled more easily than higher value claims which makes sense for companies. So the next question is should you have multiple small policies rather than one large value life insurance policy? Think about this – it would cost you more but probably have higher chances of getting claim paid!

I am publishing the chart which for 2008 – 09 which shows the Life Insurance claims filed in a year both in terms of number and amount and the percentage of claims settled, rejected and pending for each company. I hope this would help you to select the right insurance provider for you.

Total Claims for the Year Claims Paid Claims Rejected Claims Pending at the end of Year
# of Policies Benefit Amount # of Policies Benefit Amount # of Policies Benefit Amount # of Policies Benefit Amount
LIC 5,91,097 4,444 95% 94% 1% 2% 2% 3%
Max new York Life 3,938 78 90% 85% 8% 12% 2% 2%
Birla Sunlife 2,757 75 89% 79% 10% 20% 1% 1%
HDFC Standard 2,898 49 88% 77% 5% 7% 7% 17%
Bajaj Allianz 12,011 213 87% 82% 8% 11% 4% 7%
Reliance Life 3,701 46 87% 76% 6% 9% 8% 15%
ICICI Pru 10,743 128 87% 79% 5% 7% 8% 13%
ING Vysya 1,523 28 77% 62% 8% 20% 14% 17%
Kotak Mahindra 1,300 26 77% 63% 9% 16% 14% 20%
SBI Life 4,260 62 77% 76% 15% 11% 8% 13%
Aviva 1,438 31 72% 72% 19% 20% 9% 8%
Tata AIG 2,700 44 61% 64% 28% 12% 11% 24%
Metlife 729 32 58% 53% 23% 24% 19% 23%
Future Generalli 30 1 57% 59% 30% 35% 13% 6%
Bharti AXA 203 6 53% 52% 45% 45% 2% 3%
Sahara 439 4 45% 49% 12% 0% 43% 50%
Shriram 791 11 39% 37% 24% 30% 36% 32%
Canara HSBC 16 1 31% 28% 19% 7% 50% 65%
IDBI Fortis 39 1 31% 25% 5% 4% 64% 72%
Aegon Religare 7 1 0% 0% 71% 79% 29% 21%
DLF Pramerica Not Available in 2008 – 09
Star Union Not Available in 2008 – 09
All Private 49,523 835 82% 76% 10% 13% 8% 11%
Industry Total 6,40,620 5,279 94% 91% 2% 3% 3% 5%

I am in process of going through the annual report of IRDA and would publish some interesting facts and figures about Indian Insurance providers in next few days.

You can read about The updated Claim Settlement Ratio for 2010-11 here.

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