Six Factors to Consider

Your Money: Six factors to consider when selecting a life insurance firm

The second half of 2020-21 saw a 16% year-on-year business premium growth.

Six Factors to Consider With more people preferring to buy single premium policies (as a protection against future loss of income).

Six Factors to Consider

The Covid-19 pandemic has been a wake-up call regarding the importance of life insurance in challenging times.

While life insurance may still be some way from a pull product.

It has achieved the status of a nudge product.

The second half of 2020-21 saw a 16% year-on-year business premium growth.

With more people preferring to buy single premium policies (as a protection against future loss of income).

While it is good that people are becoming more aware towards purchasing life insurance policies.

It is equally important to choose a right life insurance company.

Here are some factors that should be consider while choosing a life insurance company:

Claims ratio:

Claim settlement ratio (CSR) is simply the percentage of claims settle by an insurance company against total claims receive each year.

A high CSR shows that it’s easier to settle claims with the company.

Lot of weightage is given to the claim settlement ratio to assess the customer friendliness of life insurers.

Products offer:

After the pandemic, consumers are looking for better life insurance products, along with personalize options.

The need of the hour is flexibility in payments, innovative products.

Personalize solutions.

Customers should look at the product features, riders, coverages and terms.

Conditions provided by the companies.

Web aggregators provide a clear comparison of insurance products.

Can help in taking the right decision.

Six Factors to Consider

Tech-savvy companies:

With the increasing focus on social distancing and contactless transactions, more.

More consumers are turning to online modes of buying and renewing life insurance.

Customers should choose companies that offer digitally-enabled omnichannel systems.

Better online functionalities.

Solvency margins:

The reputation and financial strength of the promoters.

The insurance company is very important to understand whether it can manage the policyholder’s fund prudently.

Whether it would be able to honors its commitment.

To understand the financial strength of the insurer, solvency margin should be understood.

Solvency margin of a company is a measurement of its ability to meet its debt obligations.

Claims obligations and other financial commitments.

Higher the solvency margin, more capable are the insurance companies in settling the claims.

As per IRDAI, insurers must maintain a minimum solvency margin of 150%.

Solvency margin of each company is publish in the annual report of IRDAI.

Comparison can be make on this basis.

Service quality:

Professionalism of the agent or the front sales staff talks volume about the company.

Whether the agent patiently listens and understands the customer’s needs.

Is busy making a sales pitch without concern about the customer’s financial needs is important .

The final decision take only if one is satisfy with the services of the sales staff during the initial meetings.

Six Factors to Consider

Reviews and ratings:

Ratings and reviews of the insurance companies can be quite helpful in choosing the right insurer.

Although some of it may be fake and generate by competition.

A volley of complaints of a similar nature against a company should not be ignore as it is a barometer of customer satisfaction.

As a buyer, one should avoid succumbing to pressure from insurers or officials.

Focus on buying the right product with the right company based on one‘s needs.

 

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