Using a life insurance company, it’s important to look at the financial soundness of the company as life insurance is a long-term investment. You need to look at the solvency ratio of the life insurance company. A higher solvency ratio represents a company’s financial solidity to protect itself from the risk of insolvency during difficult times.
Customer satisfaction and service quality are the two important aspects to consider while choosing a life insurance company. It is important to go with the insurance company that offers excellent quality customer service along with high-level customer satisfaction.
Claim settlement ratio
Claim settlement ratio refers to the percentage of insurance claims settled by the life insurance company against the total claims received in the particular year. The industry regulator, IRDAI publishes the claim settlement ratio of each life insurance company in the annual report. It’s always ideal to go with life insurance companies that have a high claim settlement ratio.
Premium and cost
Insurance companies will have to incur various expenses such as the commission for intermediaries, agents, cost of advertising, underwriting, etc. However, these expenses will be taken out of the premium charged. Hence, the higher the expense ratio higher will be the premium. With the online plans, Insurance plans are offered at a reduced cost. The premium for the life insurance plans varies from insurance company to insurance company based on your age, type of the plan, features and the coverage amount you are opting for. Hence, while choosing the life insurance company, it is important to compare the plans offered based on the benefits and cost of the insurance products.
Most of the life insurance companies in India offer a broad range of products. Every insurance company keeps coming up with innovative insurance products with unique features. While selecting the insurance company, you need to check the type of products it offers and its features that meet your life insurance and investment needs.