Claim Settlement Ratio:
Claim Settlement Ratio is the percentage of the claims paid to the customers out of total claims received by the insurance companies for a Financial Year. The balance claims are rejected for impersonation, misrepresentation, fraud, or pending decision by the Insurance Companies.
The Claim Settlement Ratio report announced on yearly basis by the IRDAI (Insurance Regulatory and Development Authority of India). Like RBI for Banking and SEBI for Security and Equity, IRDAI is regulatory for Insurance sector in India.
IRDAI was constituted by the Insurance Regulatory and Development Authority Act, 1999, an Act of Parliament passed by the Government of India. The headquarter of IRDAI is in Hyderabad, Telangana, formally it was in Delhi till 2001.
People can use Claim Settlement Ratio for Term Insurance buying. As higher percentage of Claim Settlement Ratio, there is more chance to pay your claim timely. The insurance companies which have higher Claim Settlement Ratio, have great trust among the people.
Normally, with higher Claim Settlement Ratio, insurance companies follow the basic formalities in strict manner during the initiation of the insurance policy. Insurance Companies will ask you for proper KYC documents, full length photo with the insurance adviser, medical test conducted by insurance company, ITR for income proof and etc. Then after verification and satisfaction only on the documents, personal data, and medical data provided by you, insurance company will issue Insurance to you, otherwise reject to issue insurance policy to you. After going through the proper formalities, if you got the policy, then there will be less chance to reject your claim.
The claim rejection will be due to the following reason only;
- You have concealed any illness and claim raised due to that illness.
- You have done fraud with insurer.
- Your insurance policy is Lapsed.
- You was engaged in anti-nation activity.
- You committed suicide within the prescribed period of policy initiation, etc.