IRDA Claim Settlement Ratio: Life Insurance

A claim settlement process is initiated when the claim is reported to the respective insurance company. Reporting a claim can be done online, over the phone, by visiting the insurance company's office, or by other methods the insurance company specifies.

The person who reports a claim should furnish the insurance company with the documents they require in order to substantiate and verify the claim. Although the type of documents needed will vary by insurance company, policy, nature of the claim, and death of the policyholder, most insurance companies require similar sets of documents.

After the required documents have been submitted by the beneficiary or claimant, the insurance company will begin to assess the claim and its legitimacy. The insurance company may appoint an assessor to investigate the claim in order to verify the details. This process is crucial in ascertaining the relationship between the claimant and policyholder and determining if they are the beneficiaries that the policyholder has stated in their life insurance policy document
 

After the insurance company's assessor assesses the claim settlement application and verifies it, the insurance company will decide if they should accept or reject the claim. If the details furnished were wrong, or if the beneficiary is not who the policyholder stated, the claim will be rejected.

On the other hand, if the beneficiary is correct and all documentation is in place, the claim is accepted. The insurance company will start the payment of the settlement amount based on the terms and conditions of the life insurance policy.
 

After the claimant agrees to the settlement amount proposed by the insurance company, the insurance company will process the payment for the beneficiary. The claim settlement payment may be paid out via cheque, bank transfer, or electronic payment.

Claims settlements take days to weeks to process and do not happen overnight. According to the policyholder's death and circumstances surrounding it, as well as any challenges surrounding the policy or issues in documentation, the process could extend further. Claimants must ensure they bring the necessary documents to finish the process quicker and smoothly.
 

The Insurance Regulatory and Development Authority of India (IRDAI) is the Indian insurance industry's governing authority. It sets down the rules and regulations for the Indian insurance industry. 
 

A life insurance Claim Settlement Ratio is a value that shows how many claims an insurance company received in a year and how many they settled. CSR is the percentage of claims an insurance company settled in that year compared to the claims received.
 

In general, a higher IRDAI Claim Settlement Ratio signifies a lower risk and lower probability of claim rejections by the insurance company. Higher CSR means the insurance company is trustworthy and settles claims fast.