Term plan insurance is one great way to leave behind a legacy for your family. When the primary earner of a family passes away, it poses emotional and financial difficulties to the family. The dependents have to live a hard time while dealing with the stress of losing a loved one and the financial uncertainties. In this case, insurance always eases the problems, especially financial ones.
While buying a term insurance plan, it is crucial to understand the claim settlement process and ensure your plan’s nominee knows well about it too.
The policy nominee can file a claim to the insurance company to avail the benefit in case of the policyholder’s unfortunate death. Most term plan insurance companies offer seamless claim processing so that the beneficiary can get insurance coverage smoothly. A few things to keep in mind for claim settlement of a term insurance plan:
- The insurance policy should be active, and the premiums get paid appropriately.
- The term insurance plan must cover the specific incident for which the claim is filed.
- If there is any possibility of policy expulsion.
What is Claim Settlement?
In layman terms, when a policyholder formally requests an insurance claim for coverage or compensation of covered loss or policy event, it is called as an insurance claim. The term plan insurance company validates the application and, on approval, releases payment to the insured or a third-party on behalf of the insured.
When an insurer settles a claim by paying money to a policyholder or the nominee for the incidence of a loss or risk against which they have insurance, it is called claim settlement.
What is the claim settlement ratio?
The claim settlement ratio specifies the total number of death claims that are settled by an insurance company. On dividing the total number of death claims received by the total number of death claims paid, you get the claim settlement ratio. For example, a term plan insurance company receives 1000 death claims and settles 970, the claim settlement ratio of that company will be 97%. Most people prefer term insurance companies that have a higher claim settlement ratio as it acts as a reliability indicator to them. Also, make sure you check the term insurance premium using an online calculator before buying one.
Why does claim settlement matter?
The sole reason why you opt for a term plan insurance is that it will provide financial protection to their family. It becomes imperative to make sure that you do your research on claim settlement ratios of different insurance companies before you purchase your policy. You wouldn’t want your family to face a financial setback when it comes to claiming settlement or facing unexpected hassles.
Which Insurance Company Should You Choose?
Various companies offer attractive term insurance plans with numerous benefits. It is crucial that the plan you choose meets your needs and provides you with value for money. Never ignore the claim settlement ratio of the insurance company for low-cost premiums. In India, Max Life Insurance is a leading company that provides term plan insurance and has a high claim settlement percentage of 98.74%. The company also offers seamless claim settlements to all its policyholders.
Make sure you educate your dependent or nominee about the policy you have chosen. At the time of the settlement, you won’t be there to help your family with the formalities. Keep your family aware of the terms and conditions related to your plan, the assured sum amount, and how they can claim it. Whenever you decide to buy a term plan insurance, acknowledge the claim settlement ratio as an important factor and carefully conduct your term insurance comparison. It will help you safeguard your family’s future for the time ahead.