While it is pretty clear that Indians are grossly underinsured and that means they are living dangerously, let us see how they can pick up the right insurer in case they are convinced of its utility in their lives. The IRDAI Handbook 2016-17 is full of data comparing the performance indicators of the insurers. The first one is the duration-wise settlement of death claims. The regulator has clearly asked the insurers to settle non-early claims within 15 days and early claims within 90 days. Non-early claims are settled only on receipt of the death certificate and a simple claim form. Claims which arise because of the death of the life assured within three years of taking the policies are known as early claims.

Early claims
Since some investigations are required before the settlement of early claims, more time is allowed in settling such claims. What is the proportion of early claims in the life insurance industry of India? Although no such statistics are available in the Handbook, it can safely be said that it hardly exceeds 20% (as otherwise, the insurers will find it difficult to maintain solvency). Therefore, more than 80% claims must be settled within 15 days.

At least, such claims should be positively settled in one month’s time. And no claim should be kept pending after three months. The prospects can easily look at this table to check the speed at which the claims are settled. There were seven insurers who failed to settle at least 80% claims within 30 days in 2016-17. Again, three insurers failed to settle more than 10% of claims even after 90 days.

That means, these insurers take a lot of time in investigating claims. LIC settled more than 92% of claims within one month. A few private insurers have similar claim settlement record.