What Is Term Insurance Claim Settlement Ratio?

One of the most common forms of insurance is called a term life insurance . At its most basic, a term life insurance is a policy that provides financial security to your family if you prematurely pass away. The ‘term’ in its name refers to the length of time for which the policy is active. It is an excellent way to ensure that your family gets the necessary funds to secure their goals in your absence.

A term insurance plan is quite unique when it comes to some of its features. Let us take a look at some of the best features of a term life insurance policy.

• Increasing term insurance: The assured sum increases every year.
• Decreasing term insurance: The assured sum decreases every year.
• Return of premium policy: In this type of term insurance, the paid premium is returned back to the policyholder if they survive the policy term.
• Level Term Insurance: In this variant, the sum assured remains fixed throughout the policy term.

1. Term life insurance is one of the cheapest forms of insurance. Even when you opt for significantly large life coverage, you’ll find that the premiums will be quite affordable.
2. There is no upper limit to the life cover that you can choose when it comes to term insurance.
3. Term insurance plans also offer long term durations.
4. Most term insurance plans do not have a maturity benefit.
5. Types of term insurance:
6. Unlike health insurance , where the insured sum receives a bonus for an unclaimed year, a term insurance does not feature any kind of bonus.
   Term Insurance Claim Settlement Ratio

One of the most important phrases that you’ll hear when you plan to buy term insurance is the claim settlement ratio. The claim settlement ratio is the percentage of claims approved and settled by the insurance company against the total number of claims. Basically, the figure indicates whether the insurer has a good history or record of settling insurance claims.

It is an absolute must to know the claim settlement ratio of an insurer before you buy term insurance. You’d want an insurer with a good history of paying the assured sum when the time comes. You’re buying insurance because you want your family to get the necessary finances, and you don’t want their claim to be rejected in their time of need. Therefore, always compare term insurance providers on the basis of their claim settlement ratios. The higher the better.

Thus, a term insurance plan lets you look over your family as a guardian angel. It gives them the financial strength to carry on with their life in your absence. Among other factors like the life cover and premiums, you should also ensure that your insurer has a good track record of settling claims. Don’t let a poor claim settlement ratio come between your family’s financial security.

The information contained herein is generic in nature and is meant for educational purposes only. Nothing here is to be construed as an investment or financial or taxation advice nor to be considered as an invitation or solicitation or advertisement for any financial product. Readers are advised to exercise discretion and should seek independent professional advice prior to making any investment decision in relation to any financial product. Aditya Birla Capital Group is not liable for any decision arising out of the use of this information.