Some months ago, two of my office colleagues had bereavements in their families and they filed claims for term insurance plans. From what they told me, in one case the claims process was very smooth, in the other there were endless rounds of querying, calls and investigations. Could it be because one of the companies was a public sector insurance company? Usually, what are the circumstances in which the claims are settled easily and when is the process prolonged?
—Mandeep Trivedi
Claim settlement experience varies by insurers. During 2015-16, the proportion of death claims paid vis-a-vis total claims ranged from 60% to 98% across insurers. This variability is not necessarily linked to ownership. That’s why, I recommend that while selecting an insurer, you must look at their claim settlement track record. Select insurers that settled at least 90% of their death claims.
Another metric that you may want to evaluate is the number of grievances raised against the insurer. This measures the number of customer disputes that insurer got into. Since it is natural for grievances to increase with book size, you could normalize grievances reported by the number of lives covered by the insurer. Opt for insurers with low grievance to lives ratio.
