April 20, 2021

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Why should Claim Settlement Ratio Matter To You?

Claim Settlement Ratio

Claim settlement ratio (CSR) is the total sum of insurance claims approved by an insurer divided by the total sum of insurance claims they get. It is a crucial factor to consider when buying term insurance policies from any insurance provider. But how and why does the claim settlement ratio matter to the insured or their beneficiaries? Here’s your answer!

What Does Claim Settlement Ratio Mean For Your Insurance Purchase?

The CSR of an insurance company is an aspect that has to be considered before buying a plan from them. This is the factor that ultimately decides whether it will be easy for the beneficiaries to get the claim amount in your absence. Thus, it matters to you when you plan to invest in an insurance policy.

An insurance company that has a high claim settlement ratio rightfully happens to be the better option to buy your insurance policy from. After all, there is a greater likelihood of that company paying the assured sum to your beneficiaries. In simple words, you should always purchase term insurance policies from an insurance company that shows a high CSR.

Reasons for insurance claims to be rejected

There is hardly any insurer who has a hundred per cent claim settlement ratio. As such, there can be other reasons for your insurance claim to get rejected.

Insurance Policy Gets Lapsed

Your insurance policy will lapse and become ineffective if you don’t pay the premiums on time. Generally, term insurance plans come with a grace period for paying your premium dues. Suppose you are unable to make your payment within this period, your policy lapses. No claims made on lapsed policies are approved.

The easiest way to avoid such an incident is to pay the insurance premiums right on time. It ensures that your beneficiaries do not have to face the hassle during the process of claim settlement. Even being late on paying the premium might make the insurer charge you a late fee.

Incomplete Or Incorrect Disclosure

According to the Insurance Act of 1948, an insurance policy can be questioned within three years on the basis that the insured suppressed such facts based on which the policy and its riders were revived or issued. In simple words, if you don’t provide authentic details in your application form and hide crucial personal details, it might make the policy claim unenforceable.

To make sure that such a situation never arises, ensure accuracy in all the personal details you provide. If you have any doubts regarding anything related to the policy, ask your insurance agent about it right away. Your application for the policy needs to be one hundred per cent accurate and thorough.

The Bottom Line

Knowing the claim settlement ratio is crucial to ensure that your beneficiaries’ policy claims are not rejected. In addition to that, make sure that all the required documents are in order so that your beneficiaries don’t face any trouble while raising an insurance claim with the company.

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