Claim Settlement Ratio for Term Insurance India 2011-2012

claim settlement ratio approved
Claim Settlement Ratio (or IRDA claim settlement ratio) is the total number of death claims approved by an insurance company, divided by the total no. of death claims received by the insurance company. It is generally measured for a period of one financial year.  It is measured for all products of the company put together (not term insurance plans alone).
To explain this, if an insurance company received 1000 death claims between Apr 1, 2012 and Mar 31, 2013, out of which it

  • paid 973 claims to the nominees of those dead,
  • rejected 16 claims, and
  • is yet to take a decision on the remaining (1000-973-16=) 11 claims,


  • the claim settlement ratio (or claims acceptance ratio) of the insurance company = 973/1000 = 97.3%
  • the claim repudiation ratio (or claims rejection ratio) of the company = 16/1000 = 1.6%
  • the claim pending ratio of the company = 11/1000 = 1.1%

All ratios are measured in percentages. And thanks to standardization done by the IRDA, it’s that simple to measure.
Why is IRDA Claims Ratio important when buying a Term Insurance plan?
Especially when you buy term insurance, it is strongly recommended that you look at claims ratio.  This is because IRDA claim settlement ratio indicates

  • the overall quality of customer portfolio of the insurance company and
  • also indicates the chances* that your claim will be settled.

Higher the claim settlement ratio, better will be your comfort level on claim settlement when applying for a term insurance plan.
Claim Settlement Ratio for 2011-2012
Claim Settlement Ratios of all life insurance companies are reported by the insurance regulator (IRDA) in their annual report.  This can be found in IRDA’s website as well.  I have tried to compare claims ratio of life insurance companies in India for 2011-2012 from the IRDA Annual Report (which is the latest one when this article is being written, and which was released in Dec 2012).  Let us look at which ones have the best claim settlement ratio in life insurance in India.
If I were buying a term insurance plan in India, I would look at companies with a claim settlement ratio more than 90%.  So this becomes like a starting point for shortlisting life insurance companies when buying a term insurance plan.

Click anywhere on the image below to see it full screen.

IRDA Claim Settlement Ratio of Life Insurance Companies in 2009-2010, 2010-2011, 2011-2012
Here’s a trend of claim settlement ratio for Life Insurance Companies in India for the last 3 years reported by the IRDA. Look for the consistency in the trend for some insurance companies – those should be the ones you should ideally buy the term insurance plan from.

Click anywhere on the image below to see it full screen.

We prefer not to influence your choice of company, and only give you a general direction with the information available.

Important*  The claim settlement ratios above are at Company level and for all their products together.  It is not for term insurance plans alone.  IRDA publishes this information only at a company level and not product-wise.
Be a little careful when you are evaluating Claims Ratio for buying a Term Insurance plan. Overall Claims Settlement Ratio is generally much higher than claims settlement ratio for only term insurance plans. So some companies which have a large number of term insurance customers may show a lower overall claims ratio.

But you do not have to worry too much about this.  Just ensure that you apply transparently and declare honestly.  There is no way any company will reject your claim. Understand it this way – every genuine claim will be definitely paid out, and every false claim will be definitely rejected. So while the above claims ratio information is good to go by, YOUR claim settlement really depends on YOU, the person who has applied for it. All YOU need to worry about is that when YOU apply for a term insurance plan, make sure all information and documents that YOU submit to the insurance company are accurate and complete.  Then rest assured the company will settle YOUR claim.
After this article was written, the latest Claim Settlement Ratio for 2012-2013 was announced by IRDA in Jan 2014.

Did this article help you?
Give it a thumbs up!

Share the message with your friends and colleagues.
  • Facebook
  • Google Plus
  • Twitter
  • LinkedIn
  • Pinterest
  • Email
  • RSS
  • Print

  • Divyesh

    Liked your article. Nicely explained.

    Just 1 question. Some companies have very very low claims ratios. Should I not even consider them?

    • MintWise


      Claims Ratio is only one of the factors. Read the article (How to Compare and Buy Term Insurance Plans) to understand this better.

      Most companies that have low claims settlement ratios as of today are all new private companies with a small customer base. As the base keeps increasing year on year and as they gain better expertise, their claims ratios are expected to move into the 80s, if not higher. It may take time, though.

      For the purpose of your decision, as long as you mention everything in the application form transparently, and as long as the term plan itself does not have exclusions, your claim should be settled because the regulator has common rules across companies.

      So fear not, and take a conscious call looking at all factors in the write-up I mentioned above.

  • Paresh Mehta

    Hi. you have made this claim ratio measurement formula very clear. thanks a lot.

    you have mentioned that the claims ratio given by our IRDA is on all policies and not only for term insurance claims. where can i get the claims ratio for term insurance for all companies?


    • MintWise

      There is no place you can get it as of today, Paresh. I wish IRDA could publish it given the surging interest of online customers for term insurance. I am sure they are listening and they soon might publish those figures. Till then, the overall claims settlement ratio shown in this article is still a decent indicator to go with.

      And thanks a lot for your kind words.

  • Srinivasulu R N V

    I don’t agree. There is no point in looking at this claims ratio when you are buying
    term insurance. You need to see which company you are looking at
    because generally younger companies have lower claims ratio overall and
    as they age their claims ratio gets better and touches the 90s mark. If
    you look at term insurance alone, then almost all companies could be in
    the range of 60-75%.

    • mintwise

      Completely agree with you, Srinivasulu. But I would rather not guess the claims ratio for term insurance, and use the overall ratio as indicator. Let’s look at it like this – if overall claims ratio improves with insurance company’s age then higher the claims ratio, better will be their processes and better will be their experience in handling claims. I would go with that.

  • Sureshgopi

    very informative. please tell me if i die in an accident and was a little drunk will i get the claim or not

  • Pednekar C

    this is a good write-up. very useful to read for term insurance buyers. thanks.

  • Dilip

    Can u give some case study on why claims denied by Insurance co. e.g. a persons claim denied because he went in farm without wearing safety shoos & a sneak bite him.

  • MintWise

    Unfortunately, no. Sorry to disappoint.