How should I select my insurer?

To make that decision, you have to look at a few parameters in your life insurance company such as:

• Brand trust

• Claim processing time

• Claim settlement ratio

• Customer reviews

• Solvency ratio

Evaluating these factors before buying a term plan will help you choose the best life insurance company for your needs.

It’s a no-brainer really. You must buy term insurance from a brand you trust, exactly how you buy your smartphones, laptops and other things from brands you trust. 

You must be familiar with this brand and be able to trust them to pay your claim and address all your queries or complaints without any delay so that your family can avert any financial distress in your absence. Also, you would ideally want to select a reputed brand that honours your term plan contract and ensures your loved ones get the payout when you’re not around during the claim process. 

No. The reason is simple.
 

You don’t want your family to wait for days and months, constantly following up with the insurer to get the life cover, right?  
 

So, look for an insurer with low claim processing time, because you know they will pay out the insurance money at the earliest. Most insurers boast about a one-day claim settlement. Any insurer with 1 day+ claim processing time is a no-no.

It gives you an indication of how many death claims the life insurance company has approved. It is calculated by dividing the total number of claims approved by the insurer by the total number of claims received by them. This is quite an important factor and the insurers are really competitive about this! Best in the industry have claim settlement ratios in the range of 98-100%. 

It's best to opt for an insurer with a claim settlement ratio of 97% and above because the higher the ratio, the higher the chance that the claim your nominees raise will be settled by the insurer. You can check this number on the insurer’s website. 

Nothing beats the recommendation and opinion of the people who have been on the same journey before. Online reviews on insurers’ websites and third-party websites make it really easy to understand the company. And of course, word of mouth is also an option! 

Ask your friends and family too, about what they think of the insurer. Look at an overall customer review score of 4 out of 5 or somesuch. 
 

Pro-tip: While it is good to know what others think, it is important to do your own research objectively. Don’t miss the other parameters mentioned above.

You always want to be sure that in a big downturn event, the insurer is capable of paying the sum assured, right? Well, the solvency ratio answers just that. It is the insurer’s financial capacity to meet its liabilities. But the interesting part is, you don’t need to worry about your insurer’s solvency ratio. It's something that’s taken care of by the IRDAI. 

Yes. Depending on your requirement you can always
 

• Call your insurer's customer care number

• Contact an insurance agent or your bank's relationship manager (if you're buying your policy from one)

• Get in touch with a financial/insurance advisor 

Yes, your nominees can approach your insurer for assistance during the claim process. The insurer may be able to guide your nominees through the claim process so that they do not make any mistakes. 
 

Your nominees can still ask for help from your insurer even if: 
 

• You bought the plan online 

• Your nominee is not physically present for the claim process

Unfortunately, yes, they can reject your term insurance application even if you are eligible to get one. 
 

The following could be some reasons for the rejection: 
 

• Specific health issues

• Age

• Hazardous occupation

• Dangerous hobbies

• Poor lifestyle choices 

• Income limitations

• Past criminal record 

• Previous application declines

• Falsifying information

• History of declined applications

Find out more about term plan application rejection even if you are eligible to get one. 

See, even if one insurer has increased your premium, chances are others will do it too. So, either you get the application approved by paying the extra premium or you withdraw your application, understand why your premium was increased and re-apply after addressing those concerns. 

Before you apply to another insurer, try to understand why your insurer has increased your premium. Your premium could have been increased due to factors such as: 

• Medical history - If you have any medical conditions such as diabetes, cancer, or heart disease, your premium may increase

• Unhealthy lifestyle - Unhealthy habits such as smoking, drinking, or a sedentary lifestyle can affect your health and increase your premium

• Occupation and vocation - If you have a high-risk occupation, such as a stuntman or a pilot, etc. or if you pursue high-risk hobbies like rock climbing, racing, etc., it can increase your premium

Find out more about factors that can increase your term insurance premiums. 

Depending on what reason your insurer gives, you can then decide if you want to apply with a new insurer or not. For example, if your premium was increased due to a health concern, another insurer is also very likely to do it. So you should consult a doctor and improve your health and then re-apply to an insurer of your choice. 

See, there’s no benefit in applying to two insurers. It will in fact create more hassles for you because you will have to follow multiple application processes and undergo multiple medical tests. Your nominees will also have to file these claims separately. And if one insurer rejects your term plan application, chances are that the other insurer will reject it as well. 
 

Find out more about applying at two insurers to reduce the risk of application rejection. 

If one insurer rejects your term plan application, chances are that the other insurer will reject it as well. So, you are not exactly reducing risk by doing this. In fact, you are increasing the hassles for yourself. If you apply to two insurers, you’ll have to follow multiple processes and take multiple medical tests.
 

Find out more about applying at two insurers to reduce the risk of application rejection. 

Yes, irrespective of where you have bought your term plan from, your nominees can still approach your insurer for assistance during the claim process. Your insurer may be able to guide them during the claim process so that they do not make any mistakes. 
 

Find out if your term insurance claim process will be more difficult if you have bought your plan online.

Ideally, you should. You don’t want a non-cooperative customer service team if you want to make any edits or know more about your policy or if your nominees need assistance during the claim process. You can read customer reviews of your insurer of choice to figure this out. 

Some insurers may have separate NRI helplines which cater to their policy-related topics. It is best to check this aspect with your insurer once.  

Don’t just prioritise a discount. Check if the insurer scores well in these aspects too:
 

• Brand trust

• Claim processing time

• Claim settlement ratio

• Customer reviews

• Solvency ratio

If they do and are offering a discount, then you may choose them.

Insurers that have been operating for a long time are more likely to have acquired a reputation for themselves, good or bad. 
 

But at the end of the day, all you need to consider are brand trust, claim settlement ratio, claim processing time, customer reviews and solvency ratio and not their duration of existence in the industry. An older insurer has more chances of ranking high on these parameters but not necessarily.