1. Claim Settlement Ratio (CSR), published by IRDA and highlighted by insurers for selling insurance, should be used as just one of the factors while converging on a Term policy.
2. In fact, IRDA does not even differentiate between CSR of pure term life insurance and investment-oriented life insurance policies.
3. CSR is just a simple statistical ratio of settled claims and does not represent the probability of claim acceptance in future.
4. It doesn't provide info on:-
a) types of policies covered
b) breakup of sum insured
c) reasons for rejected claims
d) cause of the deaths claimed
e) right and wrong rejection.
5. As the burden of proving fraud lies with the insurer, and also if there is a delay in claims by the nominee, CSR will get affected.
6. As CSR is a sum total ratio, if two insurers merge in future, CSR could change drastically which a new customer can't decipher.
7. If CSR would be so sacrosanct, only LIC policies would sell, although it has actually rejected far more number of claims.
8. On the other hand, several private insurers have made significant headway in selling policies, notwithstanding their lower CSR, and subsequent years would gradually increase their CSR too.
9. At best, CSR should be used to weed out the worst, within a common span of operations, instead of selecting the best.
10. Although choice of selecting an insurer is personal, with time the "CSR short-cut" method should eventually give way to more logical hands-on selection, by believing in truthful declaration at the outset itself, from various insurers.
11. It is also important to know that in the first 2 years, an insurer is allowed to deny a claim if the cause of death is suicide, or there was “misrepresentation” while applying.
12. Due to this, insurers with older customer base are likely to have higher CSR than newer companies.
13. One can't totally deny that private insurers litigate more before settlement, but that shouldn't be the sole criteria of selection if your application is totally honest and truthful, as their lower premiums cannot be ignored.
14. However, if an insurer can establish a fraud within 3 years, then it can cancel the policy, deny a death claim and even refund of premium.
15. If misrepresentation or suppression of facts (not amounting to a fraud) is detected, the premiums may get returned without death claim payment.
16. As frauds committed by customers cannot be blamed on insurers, chasing and denying such claims is in the interest of good customers, even if it is at the cost of CSR going down.
17. Always prefer buying a term policy online, as it is in your interest (not the agent’s) to ensure that you fill every detail in the application form yourself only without any margin of error.
18. Also, you must declare everything and answer every question honestly to the medical examiner, even pointing out anything that is missing, and ensure it is noted, as it could be a reason for claim rejection later when you are not around any more.
2. In fact, IRDA does not even differentiate between CSR of pure term life insurance and investment-oriented life insurance policies.
3. CSR is just a simple statistical ratio of settled claims and does not represent the probability of claim acceptance in future.
4. It doesn't provide info on:-
a) types of policies covered
b) breakup of sum insured
c) reasons for rejected claims
d) cause of the deaths claimed
e) right and wrong rejection.
5. As the burden of proving fraud lies with the insurer, and also if there is a delay in claims by the nominee, CSR will get affected.
6. As CSR is a sum total ratio, if two insurers merge in future, CSR could change drastically which a new customer can't decipher.
7. If CSR would be so sacrosanct, only LIC policies would sell, although it has actually rejected far more number of claims.
8. On the other hand, several private insurers have made significant headway in selling policies, notwithstanding their lower CSR, and subsequent years would gradually increase their CSR too.
9. At best, CSR should be used to weed out the worst, within a common span of operations, instead of selecting the best.
10. Although choice of selecting an insurer is personal, with time the "CSR short-cut" method should eventually give way to more logical hands-on selection, by believing in truthful declaration at the outset itself, from various insurers.
11. It is also important to know that in the first 2 years, an insurer is allowed to deny a claim if the cause of death is suicide, or there was “misrepresentation” while applying.
12. Due to this, insurers with older customer base are likely to have higher CSR than newer companies.
13. One can't totally deny that private insurers litigate more before settlement, but that shouldn't be the sole criteria of selection if your application is totally honest and truthful, as their lower premiums cannot be ignored.
14. However, if an insurer can establish a fraud within 3 years, then it can cancel the policy, deny a death claim and even refund of premium.
15. If misrepresentation or suppression of facts (not amounting to a fraud) is detected, the premiums may get returned without death claim payment.
16. As frauds committed by customers cannot be blamed on insurers, chasing and denying such claims is in the interest of good customers, even if it is at the cost of CSR going down.
17. Always prefer buying a term policy online, as it is in your interest (not the agent’s) to ensure that you fill every detail in the application form yourself only without any margin of error.
18. Also, you must declare everything and answer every question honestly to the medical examiner, even pointing out anything that is missing, and ensure it is noted, as it could be a reason for claim rejection later when you are not around any more.