You might spend weeks comparing phones before buying one. But when it comes to life insurance, some people still pick a plan just because the premium looks low or the agent sounds convincing. It’s easy to forget that this isn’t just about money; it’s about choosing a partner your family might rely on someday when you’re not around.
And not every life insurance company is equal. Plans may look similar on the surface, but the difference shows up when it matters most: claims processing, payout timelines, flexibility, and service quality. Evaluating the company behind the plan is just as important as choosing the sum assured or premium amount.
So if you’re considering term insurance, here are five ways to evaluate the insurer before you say yes.
Review the Claim Settlement Ratio, But Go Deeper
A claim settlement ratio, or CSR, is the percentage of claims received by an insurer that have been settled in a year. For example, if a company gets 10,000 claims and settles 9,800, its CSR would be 98%.
But that number alone doesn’t tell the whole story. A company may have a high CSR but take longer to process complex claims or settle lower-value ones faster. What’s more helpful is looking at the following metrics.
| Metric | What It Tells You |
| Claim Settlement Ratio (CSR) | Percentage of total claims paid |
| Claim Amount Settlement Ratio | What portion of the total claim value is paid out |
| Average Claim Processing Time | How long does it usually take from filing to payout |
| Claim Rejection Reasons | Common patterns that lead to non-settlement |
Not only do premium insurers like Axis Max Life Insurance have good ratios, but they also make claims data easy to understand. Some even have service representatives who are only responsible for addressing claims in person.
Check the Company’s Track Record and Years in Operation
A life insurance company that has been around for a long time is usually an indication of financial stability, regulatory discipline, and stronger systems. It also signifies that they’ve been through several market cycles and changed their products or services to fit.
For instance, businesses that have been around for 15 to 20 years or more have had time to improve their underwriting process, create strong fraud detection systems, and provide a wider range of products that change as you go through different stages of life.
Having said that, it’s best not to discount newer insurers outright. But make sure to verify their IRDAI registration, solvency margin, and third-party reviews before trusting them with a long-term policy.
Check Product Flexibility and Customisation Options
Many buyers assume that term insurance is a singular product. But once you start using online calculators or comparing brochures, you’ll notice some plans are far more adaptable than others.
Let’s say someone like Meera, a 32-year-old graphic designer, wants a ₹1 crore policy. She might be looking for:
- Return of premium if she survives the term.
- Coverage till 65, not till 85.
- Waiver of premium rider in case of disability.
- Critical illness cover for specific risks.
Some insurers allow you to change these factors in detail. Others offer only rigid, templated plans. If your insurer provides flexible riders, staged premium options, or even joint life coverage, it gives you more control over how your policy works.
Assess Their Digital Tools and Self-Service Platforms
In the past, you had to meet with agents, fill out paperwork, and sign a lot of papers to get insurance. Today, most insurance companies offer full digital onboarding, and some even allow video-based medical tests or paperless claims.
But just having an app or website isn’t enough. You’ll want to check the following, too –
- Is their term insurance calculator easy to use and transparent?
- Do they offer plan recommendations based on actual financial goals?
- Can you download your policy, update nominees, and pay premiums without chasing anyone?
- Do they provide real-time claim tracking?
Understand the Insurer’s Financial Strength and IRDAI Disclosures
It’s not something most people look into, but a life insurance company needs to have the financial depth to honour long-term promises. A term policy bought today may not see a claim for another 25–30 years. During this time, the company must stay solvent, liquid, and complaint-free.
The Insurance Regulatory and Development Authority of India (IRDAI) regularly publishes reports and enforces strict rules.
| Financial Metric | What It Reflects |
| Solvency Ratio | Whether the insurer can meet its current and future liabilities |
| Persistency Ratio | How many people renew their policies each year (shows customer satisfaction) |
| IRDAI Complaints | Number of pending cases or regulatory observations |
| Profitability Trends | Whether the company is consistently profitable over multiple years |
How to Shortlist a Reliable Life Insurer
If you’re feeling a bit overwhelmed, that’s normal. Comparing insurance companies is not like comparing phone specs. But here’s a brief recap of what you should focus on.
- Claim Settlement Data: Look beyond percentages. Check payout timelines and average claim amounts, too.
- Years of Experience: Older isn’t always better, but long-standing insurers often offer stability.
- Flexibility in Plans: Choose companies that allow you to adjust sum assured, policy term, and riders.
- Digital Experience: An intuitive app, self-service tools, and responsive customer care go a long way.
- Financial Health: Solvency ratio, IRDAI reports, and persistency scores matter more than most think.
Conclusion
Buying term insurance isn’t about finding the most affordable quote. It’s about trusting a company with your future income. You’re not buying peace of mind for today, but you’re also locking in financial support for your family, no matter what happens down the line.
So don’t rush the process. Evaluate your insurer like you would any major financial decision and check their numbers. A thoughtful comparison today can save your loved ones a great deal of stress later.
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Disclaimer: The content on this page is generic and shared only for informational and explanatory purposes. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making any related decisions.
Tax benefit is subject to change as per the prevailing tax laws.