Karan dropped a screenshot in the family group. Three term plan quotes, one circled in red. “Going with this one. ₹2,000 a year cheaper.”
Nobody replied for a minute. His sister-in-law finally wrote back, “Cheaper, but is it any good?” Do we even know if they pay?
He didn’t. Neither do most of us. Every quote shows the price in big numbers, which makes comparing easy. Whether the company actually pays up is hidden in a report most buyers never open.
Why the Calculator Comes First
The first stop for most buyers is a term insurance plan calculator, and that’s understandable. Enter your age, income, the cover you’re after and the policy length. A yearly price shows up before your tea gets cold.
Start with ₹1 crore for 30 years. Then try ₹1.5 crore, and after that a 35-year term, one change at a time. Some changes hit hard, and some barely register. That’s where your money really goes.
Premiums on individual term plans have had zero GST since 22 September 2025, so the figures you see are lower than they were a year ago. Nice.
Still, the tool has a limit. It gives you a price. It says nothing about the day your family has to ask for the money. Two plans can cost the same and treat a claim very differently.
The Number Almost Nobody Checks
What exactly are you buying here? Not a monthly debit. You’re paying so that someone you love receives a lump sum when you’re not around. If that doesn’t happen, or happens after months of back-and-forth, the low price saved you nothing. And a family in that situation has no energy left to chase offices.
So there’s one figure worth a look before you pay. It’s the term insurance claim settlement ratio. It’s simply the share of claims an insurer paid out of the ones it received in a year. Say 1,000 families asked and 980 were paid. The ratio is 98%. (Made-up numbers, to show the maths.) The other 20 were turned down or were still waiting.
Higher is better. But a number on its own can mislead, so don’t stop there.
Also Read: Term Insurance Calculator:How to Estimate Your Ideal Premium
Reading the Number Without Fooling Yourself
One year proves very little. Look at four or five. An insurer that stays steady year after year tells you more than one with a single shiny result.
Then there’s the amount. Some reports show the ratio by number of claims, others by rupees paid. A company can clear plenty of small claims fast and still drag its feet on the big ones. You want to see both.
Check the rejected and pending counts as well. A high ratio with a long queue of pending claims isn’t as good as it looks.
Early claims, the ones made in the first few years of a policy, get examined more closely. If you can find duration-wise data, read it. Say a claim comes eighteen months after the policy began. The insurer will almost certainly go through your forms and medical history. That’s normal, and it’s one more reason to answer every question truthfully.
Where do you find all this? The annual report of the insurance regulator is one place. The public disclosures on each insurer’s own website are another. Many blogs copy figures from each other, and some are stale, so go to the source.
One more thing. A ratio is an average. It describes thousands of claims, not yours. Use it to shortlist, not to relax.
Where Claims Actually Get Stuck
Honestly, most rejections have boring reasons.
Someone ticked “non-smoker” and wasn’t. Someone forgot to mention a surgery. The nominee’s name was spelled differently on the bank account. A premium was missed, the policy lapsed, and nobody noticed for a year.
None of that shows up in a ratio. All of it is in your hands. So two things decide a claim: the insurer’s record, and your own paperwork. Only one of them is yours to fix.
Fill the form the way you’d talk to a doctor, holding nothing back. Update your nominee when life changes. Auto-pay is worth setting up too, because a missed due date is an easy mistake.
Tell your family the policy exists and where the papers live. You’d be surprised how many families have no idea. A one-page note does the job: policy number, the insurer’s contact, the nominee’s name and where the original papers are kept. Share it with the family group tonight.
Skim the exclusions as well, boring as they are. Anything unclear? Get the answer in writing before you pay.
What to Do With All This
Here’s a simple route. Use the calculator to find a fair price for the cover you need. Shortlist two or three insurers and set their claim records side by side for the past few years. Then go smaller: how is a claim filed, what papers are asked for, does the helpline pick up? Customer service seems unimportant until the day it isn’t. After that, pick the one that’s affordable and looks dependable.
Karan went back to his three quotes that evening. The one he’d circled had a patchy record. He took the second cheapest instead. It cost a little more, and he stopped worrying.
Price matters. So does trust. Ideally, you get both, so don’t trade one away. And ask around. Chances are, someone you know has been through a claim. Their story about the process will teach you more than any brochure.
Disclaimer: This article is only meant to inform. It is not financial, tax or legal advice. Premiums, claim figures and policy terms can change, so read the policy documents and check with a qualified advisor before buying.
