Claim settlement ratio

How is the Claim settlement ratio calculated?

Calculating the claim settlement ratio is easy. It can be calculated with the following formula:
 

Claim settlement ratio = (Total number of claims settled in a year / Total number of claims received in a year) * 100
 

For instance, suppose an insurance company received a total of 5000 claims in a financial year. Out of this, a total of 4900 claims were settled by the insurance company. Therefore, the claim settlement ratio will be 4900 / 5000 * 100 = 98%.
 

However, a key point to note here is that the claim settlement ratio is for the company as a whole and not plan or insurance category wise. Therefore, the above figure of 98% implies that across all the insurance categories taken together, a total of 98% of claims were approved. For instance, the term plan claim settlement ratio might be a little higher than the other ones. This offsets the claim settlement ratios of other products thus averaging out to 98%.

Why is the Claim settlement ratio Important?

The claim settlement ratio cannot be overlooked when searching for the right insurer. The following points depict the importance of a claim settlement ratio:

• Assures the financial security:
  

  Claim settlement ratio depicts the percentage of claims settled. You pay a good number of premiums over the year to stay protected financially from the uncertainties. In case your claim gets rejected, it can create serious financial difficulties. If your insurer rejects your claim, then the whole purpose of getting your insurer gets defeated. On the other hand, if the insurer approves most of your claims, then it assures you and your family of financial security.
   

• Depicts the Insurer’s reliability:

  A higher claim settlement ratio indicates the insurer’s capability and reliability to pay the claim amount whenever the claim is lodged. They are unlikely to default on their insurance claim settlement if they have consistently maintained a higher claim settlement ratio. Thus, a higher claim settlement ratio is seen as a positive indicator for the buyer of the insurance policy. Likewise, a lower claim settlement ratio creates a negative impact in the minds of the prospective policy holder.
  
  

• Co-operation from the insurer:

  A higher claim settlement ratio depicts that the insurance company is concerned about its policyholders and co-operates to ensure that they are adequately compensated for their loss. It also creates an expectation in the minds of the policyholders that the company will ensure faster processing and settlement of claims. This is what the HDFC Life Insurance Claim Settlement Ratio conveys to the policyholders.

Why is HDFC Life Claim Settlement easy and Hassle-Free?

HDFC Life Insurance has an easy and hassle-free claim settlement process. It is noteworthy that the HDFC Life Claim Settlement Ratio set a remarkable benchmark of 98.66% for the FY 2021-22. The claim can be lodged in the branch of the company as well as online whereby the policyholders can conveniently lodge their claims and solve out the queries if any.

Apart from such hassle-free and faster claim settlement, HDFC Life also provides for 1-day claim settlement. Here, the policyholder can receive the claim settlement amount within 24 hours of lodging the claim and submission of documents. Following are the conditions subject to which the policyholders can receive claim settlement within 24 hours:
 

• The policy should have been purchased online

• The insurance claim should not require field investigation to be undertaken

• The cumulative claim amount should not exceed Rs, 2 crores²

• All the claim documents shall be submitted by 3 pm on a working day.

HDFC Life holds complete accountability and responsibility to settle the claim within 24 hours on working days. In case the claim does not get settled, then HDFC Life will pay interest at the rate of 2% per annum above the bank rate for each additional day that the claim gets delayed.

Online Claim Lodging:

Online claim lodging is convenient, especially for the tech savvy people. It relieves them from going through the hassle of physically visiting the HDFC Life along with physical documents. It offers faster, seamless, paperless, and convenience in lodging the claim. If you wish to lodge the claim online, then follow the below-mentioned steps:

Step-1: Verify the Policy Details

You need to verify your policy details before lodging the claim. Through this, you can provide the necessary information from your policy viz. claim information, information about the claimant, information about the life insured, contact information of the claimant, etc.

Step-2: Submit the Details of Life Assured

The next step is to submit the details of the life assured including ID proofs, medical certificates, discharge receipt, and medical expense documents.

Step-3: Submit the Details of the Nominees

 The details of the nominee as required in the claim settlement process shall be submitted.

Documents Required for Claim Settlement

Claim settlement involves the submission of certain documents in order for the company to verify the details of the claim.

Mandatory Documents required for claims:
 

• Death claim form (including NEFT)

• Death certificate issued by the government or local municipality authority

• Original policy document, (where applicable)

• Claimant’s PAN details

• Claimant’s ID proof

• Claimant’s address proof

• Personalized cancelled cheque or Bank passbook(Printed account number, name of the account holder and IFSC code)

Based on the type of claim, additional documents required as mentioned below:  
 

In a Nutshell

Claim settlement ratio is an important criterion that every policyholder should look into before buying their policy. Also, the prospective policyholders shall maintain transparency when it comes to an insurance policy because incorrect or false information could lead to rejection of the claim in the future. This defeats the very purpose of the insurance. Thus, going with an insurer who has a proven track record for faster and higher claim settlements can help policyholders meet their objectives. With an Insurance Claim Settlement Ratio that is one of the highest in the country, HDFC Life has been consistently protecting the policyholders whenever things went south.