How to Choose Best Term Insurance Companies in India?

Term life insurance provides financial security to the family of a policyholder when they pass away. A policyholder has to pay a premium amount for a specific tenure in exchange for this life cover. If the policyholder passes away during the policy tenure the beneficiary will get the coverage amount and if he survives, the policy will lapse and no amount will be paid.

Before choosing a term insurance company to purchase a policy from, it’s important to consider certain key factors. Here are some of the factors to look at while choosing the best term insurance company:

1. Claim Settlement Ratio (CSR)

The claim settlement ratio of an insurance company indicates the number of claims settled by an insurance company out of the total claims received in a financial year.  A high CSR is an indicator of a company’s reputation and goodwill.

It ensures the policyholders of the fact that their loved ones can easily claim the amount after their demise. This ratio is observed by the IRDAI (Insurance Regulatory and Development Authority of India) every financial year.

2. Customer Retention Ratio

Before choosing a best-term insurance company one should look at the customer retention ratio. This ratio indicates how many customers are paying the premium again out of the total active policies. This ratio is an ideal indicator of a company’s goodwill.

A high customer retention ratio of a certain company indicates that the company is an ideal choice for a customer to buy the term insurance policy from.

 3. Claim settlement procedure

The claim settlement procedure of an insurance company is a major indicator that shows after the demise of a policyholder how quickly and easily their loved ones can claim the settlement amount. The best term plan insurance company has a quick and easy claim settlement process. If the claim settlement procedure of an insurance company is too slow and difficult, the beneficiary has to face many issues to get their claim amount. A hassle-free claim settlement process of an insurance company is an ideal indicator for selecting the best one.

4. Customer support of the insurance company

A strong customer support of an insurance company is the right indicator to choose the best term plan insurance company. Queries and complaints may arise after buying the term insurance plan. To address all these queries and complaints an insurance company should have experienced customer support representatives. If the customer support of an insurance company is not good, then policyholders may face various issues in getting their concerns addressed.

5. Financial capabilities of an insurance company

Before choosing a term insurance company one has to look at the financial capabilities of that company. It indicates whether the company is financially sound to settle the claim of the policyholder or not. Various agencies provide financial ratings to insurance companies after going through proper checks. The best term plan insurance companies have good financial ratings and records.

6. Company’s goodwill and reputation

The goodwill and market reputation of an insurance company is a major factor that helps to choose the best term life insurance company. One has to buy a term insurance plan from a company that has a reputation and goodwill in the market. This ensures a policyholder that their family members can easily claim the coverage amount after them.

One can check the company’s goodwill by looking at various factors such as the number of years from which the company has been involved in business, products sold by the company, the company’s management, presence of the business, number of insurance partners, etc.

7. Coverage amount offered by the company

While looking for the best term insurance company one should look for the coverage amount offered. The amount should be enough to cover the financial requirements of your loved ones after your demise. The low coverage amount can lead to financial problems for your loved ones after your demise. An individual should not make decisions based on lavish advertisements.

8. Add-ons offered by the company

Before choosing a term insurance company one should look at the add-ons or additional benefits the company is providing to the policyholder. The additional benefits include coverage from accidental demise, critical illness coverage, loan repayment, life-stage benefits, etc. An individual can select the insurance company which provides add-on benefits. These add-ons provide additional financial security to the loved ones of policyholders in case of unfortunate demise.

Conclusion

While choosing the best term insurance company an individual has to consider all the factors mentioned above. It helps your loved ones to meet their financial needs even after your demise. An insurance company with a high CSR, good retention rate, easy settlement process, and good customer support can be considered. To choose the best term insurance plan you can talk with one of the PolicyX representatives.