What is Claim Settlement Ratio?

What does Claims mean?
Claims are a formal intimation to the insurance company about the receiving the sum assured as per the policy terms. The insurance company after reviewing the validity of the claims makes the agreed payment to the insured or the nominee.
The claims occur under two circumstances:
1)      Maturity Claim: This type of claim needs settlement once the policy completes the term selected. The policies like the endowment plans, money back plans or child plans fall under this category.

2)      Death Claim: This occurs in case of death of the policyholder during the term of the policy. The death could either be due to illness or accidental.

What Does Claim settlement Ratio Mean?
The claims settlement ratio is the proportion of death claims which have been settled by the insurance company from amongst the total claims received by the insurance company.
Claim Settlement Ratio = Total no. of death claims approved by the insurer  
                                                  Total no. of death claims received by the insurer.

What does Claim settlement Ratio indicate?
This ratio provides a fair idea whether the insurance company can be trusted as a good option for insurance cover especially in case of settlement of death claims since the policyholder would want a reliable insurer in case of death of the policyholder. Buying the insurance policy and premium payment is not the only objective or the end of the insurance process.
Limitations of Claim Settlement Ratio:
1)      Claim settlement Ratio gives the total number of claims settled by an insurer irrespective of the type of insurance policy. So, for an individual who wishes to analyze the ratio for each type of plan this CSR does not help.
2)      The ratio gives percentage of settlement and not actual figures which would generally give a better idea.
3)      The settlement ratio if calculated during the initial years of the product launch in the market would give a poor ratio, since it is the longetivity of the plan in the market which actually decides the CSR better.

Source- policyx/blogs/what-is-claim-settlement-ratio/

Comments

Post a Comment

Popular posts from this blog

5 Advantages Of Investing In ULIP PLANS

ULIP plan are investment instruments that combine benefits of both life insurance and investments in money markets. ULIP Plans as an investment category has a lot of inherent benefits. Here, we identify 5 advantages of investing in ULIP Plans over other investment options. Choose your investment mix On the basis of your risk appetite, you have the option to choose the mix of market entities that you invest in. You can opt to invest in debt funds if you are a low risk-taker, balanced funds if you are moderate risk-taker, and equity funds if you are a high-risk taker. You also have the option of investing in balanced funds which can range between debt funds and equity funds. Flexibility This flexibility is not available in other investment plans. It provides you with a flexibility of choosing and switching between debt and equity funds. During an uncertainty you can invest in debt funds and when the market performs well you can opt for equity funds. Staying invested for a l
Read more

What is Endowment Plan?

Endowment Plan Meaning Endowment plan is a type of life insurance coverage which is applicable only for specified period. Like any other Life Insurance, here also you will get assured sum after maturity and in case of death of the policy holder the nominee will be benefited by the amount. In this plan the specified period will be ten, fifteen, twenty years or up to certain age limit for which you have agreed. Endowment Plan= Insurance + Savings Types Types of Endowment policies popular in the market are as follows Unit-linked endowment This is a fixed term saving plan with an opportunity of life coverage. In this plan your savings can be invested in market shares thus the return you get from this completely depends upon on the performance of your investment.   Full endowments In Full Endowment plan at the start of policy you will be assured with basic sum which is also equal to death benefit. However the amount you get at the end of maturity depends on the annual
Read more

What is Children Education Plan

Quality education is the desire of most parents for their children. However, quality does not come cheap, income is not stable and life itself is uncertain. Children Education Plan has been structured towards ensuring quality education for your children and wards easily and in a most efficient manner. This policy allows you to conveniently save towards sending your children/wards to any school of your choice whether within the country or abroad. The Child Education Plan guarantees the future education of your children/wards at whatever level. It ensures that they have access to the quality of education you desire for them, whether you are there to do it or not. Just like in the ISP, a plan holder starts making a compulsory and regular savings for a number of years. The choice is however yours to decide on the duration of the policy, but this shall not be less than five years. The premium payable shall depend on the ability of every individual to contribute, although, the highe
Read more