Is Your Insurance Company ‘Financially Fit’?
Life insurance offers financial security to the family when they need it the most – when the breadwinner is no longer around. So there is a lot riding on your life insurance policy and the insurance company behind the policy. Hence it is worth the while to invest some time in understanding the ‘financial fitness’ of the insurance company.
When it comes to insuring the family against financial setbacks from the demise of the breadwinner, we recommend that individuals consider term plans. Term plans are more cost effective which means one can go a larger insurance cover at relatively affordable premiums.
Probing the financials is in the fitness of things
When you go for a term plan or any other insurance plan for the matter, it is crucial to get a handle on the financial standing of the insurance company. If the insurance company is ‘financially fit’ so to speak you know you are tethered to the right insurance company.
Here the three most important features to consider while assessing the financials of an insurance company:
- Company / Brand reputation
A consumer looking to a financial company or insurer for security and protection for his family ought to be very particular about details like company’s financial standing and reputation. Remember the insurance company’s reputation or brand is built over decades of trust and competence. Consumers usually know a good brand when they see one from how it is represented or written about. They can also visit the company websites to understand its ‘insurance’ journey and financials like profitability, dividend paying track record, among other metrics. Look for companies where sponsors have a solid track record in the financial services space, particularly life insurance.
- Claim – Settlement Ratio
If you want to know how easy or difficult it is going to be for your family to claim insurance, it is a good idea to look closely at the claim-settlement ratio. The ratio indicates how many settlements have been closed per 100 claims. A 100% claim-settlement ratio (very rare) means the insurance company has settled every claim. Insurers with relatively higher claim-settlement ratios – in the high 90s – are preferable. Details on claim settlement are typically well-presented on company websites / sales literature.
Bajaj Allianz Life Insurance has one of the best Claim Settlement Ratio of 98.1%*.
- Solvency Ratio
The solvency ratio is an indicator of how reliable the insurance company has been historically in settling pending claimswithout putting pressure on the company’s financials. Effectively the solvency ratio is a good indicator of the insurance company’s long-term stability. The ratio should be available on company website / sales literature.
So the next time you hunt for term plans or other life insurance options, take some time to first research the company behind the insurance plan. Go for insurance companies with solid track records on the aforementioned parameters.
We at Bajaj Allianz Life Insurance Company have a Solvency Ratio of 793%* which is best in the industry.
Bajaj Allianz Life Insurance has also been recognized as one of the most Promising Brands of 2015 by Economic Times.
Bajaj Allianz Life eTouch Online Term Plan, is a regular premium payment, pure term and health cover plan. The plan provides life cover combined with benefit on accidental death, accidental total permanent disability & critical illness and benefit of waiver of premium, depending on the variant opted by you.