<div><strong>By Naval Goel</strong></div><div> </div><div>Alka Tripathi, the widow of Late Rakesh Tripathi, got the shock of her life after her deceased husband's life insurance company rejected her claim. Rakesh was the only earning member in her family and Alka with their daughter Rajni were financially dependent on Rakesh's income.<br> </div><div>Even if that was not the case, it was their right to receive the life insurance claim amount. But what happened? Why did their insurance company reject the claim? There were certain reasons. The sudden demise of Rakesh in a car accident sent the entire family in a state of shock. This was natural. It was an unfortunate accident and it took the family several months to recover from this loss. <br> </div><div>Amidst the state of grief and emotional turbulence, they did not think about the life insurance policy which Rakesh had been maintaining. After almost four months, Alka got over the situation and gained some strength to get their life back on track. But the life insurance company repudiated the claim outright. Their argument was that they had to be informed within a few days of the death of the policy holder. This was the condition and was part of the terms and conditions. </div><div> </div><div>This life insurance company was the leading private sector insurance company with a great claim settlement ratio of over 98 per cent. Of course, this ratio is a key indicator of how an insurer treats such cases. One should always look into the claim settlement ratio of a company before buying insurance from it. But it is never a guarantee if there are gaps in the process, especially from the consumer end. </div><div> </div><div><strong>Knowing the process</strong></div><div>Every person who is concerned with a life insurance policy as a holder or nominee must know about the claim settlement process laid out by their insurer. It is more prudent to be practical and not shy away from the essential processes which are central in meeting the objectives set out by the policy holder towards financial security of his or her dependents. </div><div> </div><div>First and foremost, the concerned insurance company must be informed about demise of policy holder within a week of death. It is a very simple step which many people ignore. <br> </div><div>Once the company receives the intimation of policy holder's death, it asks for the below set of documents:</div><div><br>Claim form, duly filled with all necessary details</div><div>Death Certificate issued by concerned Civic Authority</div><div>Life Insurance Policy Document</div><div>Photo ID card of nominee</div><div>Address proof</div><div><br>If the policy is taken by the help of an agent, then this agent must be able to assist to complete this process of submitting the above mentioned documents. One should always keep the photo copies of these documents handy. </div><div><br><img alt="" src="http://bw-image.s3.amazonaws.com/Policy X grphic -1.jpg" style="width: 300px; height: 200px; float: right;">Apart from the above set of documents, a nominee may also be asked for additional supporting documents, in order to settle the claim in proper manner. </div><div><br>In addition, one may also be required to submit post-mortem report, medical attendant certificate, hospital certificate and employer's certificate, depending upon the reasons and circumstances under which the policy holder lost his or her life.</div><div> </div><div><strong>Claim settlement ratios: An overview </strong></div><div>Not many people know about claim settlement ratios operated by companies in India. The Insurance Regulatory and Development Authority in India (IRDAI) maintain this data with it centrally for all the insurance companies running in India. All companies have to mandatorily submit this data to the Regulator, without any exception. It is a public data and anyone can refer to it. <br> </div><div>For FY2014-15, this central authority is yet to release this data set in the public domain; however, as far as the figures from the preceding financial year i.e. FY2013-14 is concerned, it is very much on the charts. </div><div> </div><div>Going by the said data, Life Insurance Corporation (LIC) of India remains the most impressive company in terms of its claim settlement ratio. It boasts of 99.52 per cent ratio, which is amazing. The company is a giant from the public sector and is the largest insurance company in India. It's market share if more than half of the total market. After all, it has a first mover advantage in this space, with monopoly of several decades. </div><div> </div><div>Other private sector companies are also putting their efforts to manage good ratios. However, many times, it is seen that some companies just try to find reasons to reject claims and get away from the liability of settling claims. Ultimately, this hurts their brand reputation in the market. </div><div> </div><div>In overall terms, private sector registered claim settlement ratio of 88.31 per cent in FY 2013-14. </div><div> </div><div>But there are companies which are offering great ratios indeed. Take Kotak Life, for instance. This company is matching LIC's numbers when it comes to claim settlement ratios. It registered the ratio of 98.29 per cent during the FY 2013-14. That is quite an amazing performance on this scale, from a private sector insurance company. </div><div> </div><div>Max Life Insurance is also leading on this front. Their claim settlement ratio stands at 97.23 per cent. These two companies are among the best ones in the space where more than two dozen insurance companies are operating. The scenario is improving fast and most companies are striving to respect claims raised by their customers. The IRDAI is also quite serious on this front and is overseeing companies on this parameter with great caution. </div><div> </div><div><img alt="" src="http://bw-image.s3.amazonaws.com/Policy X graphic -2 .jpg" style="width: 650px; height: 267px;"></div><div> </div><div>(<em>The author, Naval Goel, CEO & Founder, PolicyX.com</em>)</div>
