How Do I Choose the Right Life Insurance Company?
A life insurance policy can be your family’s security shield in your absence. It can offer them financial protection as well as ensure that they live their lives with dignity and comfort.
A product as important as life insurance can often be confusing and worrisome as you would want to get it right. You may have concerns over the authenticity of the plan. You may also be worried about whether your loved ones will get the money when they need it the most. All of these concerns and more can be addressed by ensuring you choose a plan from the right life insurance company.
5 points to be considered while choosing the right life insurance company
- Company with a wide range of products:
Every individual has goals as per the stage he/she is in life. Some may be looking to secure their families in their absence. Others may be planning for their retirement or the education of their child. There may be other preferences - some may prefer short or long durations of premium payments, while some may have a preference in how they receive their pay-outs. In an even diverse condition, individuals may have a need to take a loan against their policy.
Keeping this in mind, a company that provides a wide range of insurance products to meet such varying needs of individuals makes the most sense when choosing a company. Financial needs can change with time or life stages. A company that walks with you and offers the right product at the right time will go a long way in helping you fulfil all your financial goals. This will also ensure ‘One View’ of your investments – which makes it easier to track them.
In the spree of grabbing market share, some insurance companies are charging considerably lower premiums. While buying an insurance policy often we consider the cost of the insurance premium, yet this should not be the only buying criteria. It is advisable to compare the premium of the plan against the life cover assured, the returns offered (in case of guaranteed products), fund performances beating the benchmarks (in case of ULIPs), bonuses applicable if any, and accordingly select the one that will serve your purpose in the hour of need and provide more value for your money.
- Healthy Financials:
The insurance company's history can offer you a glimpse into the insurer’s sound foundation, financial performance, business ethics and principles. A company is seen as healthy if its financials are in good shape and when its customers place their trust in it.
An insurance company is only as good as its ability to honour its payout to its customers at the time of their claim. For this, the company needs to be adequately capitalized. For this, you must look at the Solvency ratio of the company. At RNLIC, our Solvency ratio has continuously improved and stands at 2.35 for the financial year ending March’22, versus the mandated figure of 1.5. This strong number has been achieved on account of our rising profitability and increasing customer base, both of which have been growing year on year.
- Claim Settlement Ratio:
The claim settlement ratio is one of the most critical measures of an insurer’s reliability. The higher the ratio, the more claims an insurer accepts and honours. This means that the likelihood of your family’s claim getting rejected will be low. So, always prefer a life insurance company that consistently maintains a high claim settlement ratio. You will be delighted to learn that Reliance Nippon Life Insurance Company has a Claim Settlement Ratio of 98.6% as of March 31, 2023 – one of the highest in the industry.
- Customer reviews:
Customer reviews on the insurance company’s website, search engines, social media, etc., can be a great indicator of the company’s performance and customer service. Try to read as many reviews as possible to get an unbiased view of the company. Real-life experiences can help you make a better decision when making a purchase.
To sum it up
Selecting a plan from the right insurance company is critical if you wish to enjoy the many benefits and coverage of life insurance. A poor insurance company may not be able to offer you adequate services, timely resolutions, and foolproof financial protection. Therefore, a little research and prudence in selecting an insurer are highly advised.
Frequently Asked Questions (FAQs)
- How can you compare different insurance companies?
You can compare different insurance companies on the basis of insurance coverage provided, type of plans, claim settlement ratios, insurance premium, reputation, and other similar factors. You can find most of this information online. The IRDAI website can also be an authentic source.
- Which is the best insurance company in India?
There are several insurance companies in India right now, such as Reliance Nippon Life Insurance. You can pick the best one for your needs after carefully evaluating the factors mentioned above.
- Why is it essential to pick a good insurer?
Picking a reputable insurer will ensure that your family members are well-protected in your absence. It will also help you live a stress-free life, knowing your loved ones will be financially safe in your absence.
To get a detailed understanding of life insurance product offerings, we request you to fill out your details here and one of our experienced advisors will call you back.
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