While buying a term insurance plan majority of us worry whether the insurance company will settle the claim or not? So generally, most customers look at a company’s claim settlement ratio which is now pointless! Wondering why? Here’s the reason – IRDA has recently amended the Section 45 of the Insurance Act. This has relieved most of us from worrying whether our claims will be settlement or not. 
As per Section 45 in ‘The Insurance Act, 1938’.
The policy of life insurance cannot be questioned on any ground whatsoever after the expiry of three years from the date of the policy. So if your policy is 3 years old, no matter what happens, the life insurance company will not be able to deny claims. Life insurance companies have only three years to detect anything suspicious like a misinterpretation or a misstatement from the customer and reject the policy. Once the period of three years is over the company has to settle the claims.
Hence this criteria which was first thought to be important is now just a raw data. Because whether you check the companies claim settlement ratio or not it wouldn’t matter. Most people are still unaware about this act and hence they don’t mind paying higher premiums on the basis of claim settlement ratio. Now, that we are aware that this ratio which you are looking for is no more important after the section 45, it’s better to be aware and avoid taking decisions solely on this factor. However, even though claim settlement is not mandatory after three years there are few private insurance companies which provide assurance to their customers that their claims will be taken into consideration. The below companies have put in efforts to assure their customers.
Max Life Insurance assures that all death claims within 10 working days of receipt of all claim documents/ information. They shall pay interest @ 6% p.a. for any delays.
Edelweiss Tokio Life Insurance assures that all claims will be settled within 24 hours of submission of all required documents/ information. They shall pay interest @ 10% p.a. for any delays.
Here are other aspects you should consider before buying a term plan.
1. Premium: While most companies are still highlighting their claim settlement ratio and trying to convince people to pay higher premiums. As customers it is important to know that the claim settlement ratio is not very important after this amendment and we should try to look for term plans with lower premium rates with higher sum assured and more features. Some of them include Max Life Insurance Term plan which gives you a Rs 1 crore cover at Rs 8100/yr f and Edelweiss Tokio Life which provides Rs 1 crore sum assured at only Rs 4950/yr for a policy term of 30 years assuming the customer is a 25 year old male and a non smoker.
2. Longer cover: The sole purpose of a term plan is protection. Make sure you are fully protected. Covering yourself only for a limited period is not advisable as it may or may not serve the purpose. So if you are 25 make sure you are covered for another 55 years which is till 80 so that you don’t have any tension about your loved one’s security and also they get the benefits of the premiums you have been paying for so long. While most insurance companies provide cover upto age 65 or 70, Edelweiss Tokio Life provides it up to age 80 at a reasonable rate.
3. Benefits like riders: Many life insurance companies provide riders. These days with the probability of accidents rising. It is better to opt for a rider that keeps you secured in case of an accident. There are term plans which offer riders like accidental disability rider, this provides a complete protection along with your term plan.
All thanks to Section45, buying a term plan is now much easier for a customer! A customer can only now concentrate on price and features of a plan just like how we consider buying any other product.
My recommendation: If you are looking for a term plan with multiple features and benefits at a reasonable rate from a company which gives assurance then Edelweiss Tokio Life is what I would personally recommend. Check out their plan here: http://bit.ly/1oo8f9G
