Low Claim settlement Ratio of Aegon Religare iTerm insurance – What to do ?

POSTED BY vatsal2209 ON April 25, 2014 12:17 pm COMMENTS (14)

Dear Manish,

I am a 27 year old software engineer working in Mumbai. I am thinking of buying a 1 crore term plan insurance for me. However, as per your advice as well as others, term plan insurance is must at least till the age of retirement that is 60 years. So I understand, I need a policy for at least next 33 years. My dilemma occurs out of the fact that only Aegon, Aviva and LIC are offering a term plan for more than 30 years. Out of these Aegon Religare’s iTerm plan stands out of the crowd ad wins hands down owing to the option of riders at minimum cost (accidental and critical illness) and option to avail it till 75 years of age.

However, as mentioned everywhere and at your website too, the settlement ratio of Aegon is very low (bottom three). I understand the in the IRDA pdf, the numbers which are shown are for all the policies and not just term plans.

So I asked Aegon relationship manager to provide me death settlement ratio figures for last three years of this particular policy i.e iTerm on a company document. I am attaching his reply below.
On Tue, Apr 22, 2014 at 3:10 PM, xyz@aegonreligare.com> wrote:

Hi Mr. Ankit,

As discussed please find the below claim settlement ratio for last 3 years:

2011/12—88

2012/13 – 88%

2013/14 – 93%

Regards,

Relationship Manager

Aegon Religare Life Insurance Co. Ltd.

I am withholding the name of the person due to obvious reasons.

I talked to him again today and asked if he can show me these numbers in a company document to which he expressed his inability since these are company internal documents. Then I explained to him why I am asking this document. I told him that their term plan is one of the best in market but is losing a lot of prospective clients due to low settlement ratio. Wouldn’t it help if they can somehow publish the settlement ratio of this individual plan. It would seriously help me putting aside my doubts.

He has asked for two more days o discuss it with his team and respond back.

What do you think I should do? And if you can recommend any other company term plan for 35-40 years (possibly with riders).

I also understand that if I disclose all the information while proposing the policy, nothing on earth would be able to stop my claim, but low ratio is somehow discouraging and I would not like to have even an iota of doubt in my mind before buying something as crucial and important and as a life insurance.

Thanks,

14 replies on this article “Low Claim settlement Ratio of Aegon Religare iTerm insurance – What to do ?”

  1. ajit says:

    HI Manish ji

    I have purchase a policy from Aegon Religare Term Plan with Accidental rider.

    my age is 31 and policy value is 87 lacs and 46 lacs respectively.

    now i have heard by many of my friends and office colleagues that i have taken Term Plan from

    Non- Brand Company so please i request you to suggest me should i continue with aegon or i moved it to other company.

    personally i have faith in Aegon but his settlement ratio is Low.

    pls advice me best.

    one more question

    i am taking very little amount of Wine/Beer in some party function and i have mention this in my policy.

    in future if i will die at any reason or by alcoholic reason my claim will be reject due to this

    1. Dont worry .. Have faith. There is no issue with Aegon

  2. Satishchandra says:

    As per my research and understanding; if we are trying to buy policy after our death to secure family. We should go for term plan which have highest claim settlement rate and easy to get. As LIC offered term plan which is costly compare to any other private company. Person should split 1 cr sum assured between two companies LIC and HDFC or agon. As I had read someone if one of the company settled your claim other company has to settle as per IRDA guidlines. I don’t know if this is accurate. Any one can put more light on this information.

    1. There is no rule like that which you mentioned

      1. Satishchandra says:

        Today; I got an article from your website “No claim rejection for life insurance policies older than 3 yrs – IRDA”. Do you still feel that we need to validate the claim settlement ratio. Reason of this point – I had taken Aegon i-Term plan in October 2013 for 1 cr and paid 3 premium but based on analysis and future planning wanted to close this policy and start with new LIC or HDFC as they have good claim settlement . Please advice.

        1. No , there is no reason to validate the claim settlement anyways. I will do a post on this .

  3. vipin says:

    Usually settlement ratio increases as the company getting older into this industry. So older the insurance company higher chances of growing it’s settlement ratio. To add my reasoning to above point, usually early claims means the claims which are within 2-3 years of buy. Including LIC, all insurers do a strict scrutiny of such early claims. So there is high probability of rejection. If the insurance company started it’s business just 3-5 years back then it may receive all claims under early claims. So rejection may be higher. Ending this as a lower claim settlement ratio.
    No guarantee that a company which has the highest percentage of claim settlement ratio not rejects your claim.

    1. Hi vipin

      Thanks for your sharing your valuable comment on this topic. Please keep sharing your views in future also

      Manish

  4. Vikey says:

    Hi,

    My experience with Aegon (Term Insurance) is satisfactory from last 2 years.

    1. Glad to know that Vikey ..

  5. curiousraj says:

    I have gone through the same phase few months ago and finally opted for Aegon Religare.
    As far as Aegon Religare is concerned it was first Insurance company in India to offer online term plan. Moreover medical tests are not compulsory for Sum Assured 50 Lac. So what people did they took the term policy by providing false information online. Like someone is suffering from some fatal disease and even after that their relative/parent purchased the policy. One such incident I read on some financial article where an agent was suggesting his client to take online term policy for her daughter who was suffering from some fatal disease.
    This is the reason Claim Settlement Ratio of Aegon Religare was too low in previous years. Moreover these claim settlement ratio are not only of term plan rather it is combined of all the insurance plan offered by the company.
    So as Ashal suggested it is up to you which company you feel comfortable with. If you provide each and every detail about yourself and family and go for medical test(no extra charge) even if you take insurance of less than 50 lac.
    Aegon has one more offer. You can take term plan for house-wife as well(max 50% SI of Husband). Generally no company provides term plan for non-earning person.

  6. ashalanshu says:

    Dear Ankit, please purchase the term cover from the insurer where you are comfortable.

    Thanks

    Ashal

    1. John says:

      Well don’t you think this was an amazing answer ? You deserve an aplause

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