Term insurance: Pick insurer with consistently high claim settlement ratio

A strong persistency ratio signals customer trust, better service and fewer disputes, while a high claim settlement ratio shows how reliably an insurer honours claims-key checks before buying term cov

The recent GST exemption on term insurance has made pure protection plans significantly more affordable, leading to a surge in first-time buyers, according to media reports. Several leading life insurers, such as HDFC, Axis and SBI, have seen higher sales of term covers.

 

How should buyers decide the right coverage amount?

 

Buyers may adopt either a thumb rule or a need-based approach to deciding the amount of term cover they should buy. “A simple thumb rule is 15–20 times annual income for salaried individuals, and 10–15 times average annual profit for self-employed buyers,” says Narendra Bharindwal, president, Insurance Brokers Association