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Home >Money >Personal Finance >How to choose right insurer amid the introduction of standardized insurance plan

At times, choosing the right policy for oneself can be a challenging task, given the multiplicity of products available in the market. However, in the case of standardized insurance plans—where the definitions, conditions, coverages, exclusions, endorsements and policy wordings are the same for all policies offered by all insurers—policy buyers can still have a lot of doubts while choosing the right insurer for themselves.

For instance, the pricing of the policy plays an important role. This is because pricing generally varies from insurance company to another. Where a lower premium may simply mean lower coverage being provided by the insurer, it may also be subject to the underwriting process, where your insurer can provide you better coverage than others at a lower cost.

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Therefore, to remove confusion, buyers must do the following background checks before choosing the insurer.

"Buyers should keep three things in mind before taking up a standardized insurance plan—first, ease of onboarding and claims-settlement processes; second, the premium amount; and lastly the insurer’s after-sales support and service—including renewals," said Mohit Garg, head of products from PNB MetLife.

By checking the claim-settlement ratio, one gets to know whether the insurer settles claims promptly. The claim settlement ratio is a metric that tells the cumulative number of death claims settled by a life insurer. In other words, it helps to know the percentage of life insurance claims that an insurer has settled during a financial year against the number of claims it has received in the period. It also includes pending claims from last year.

Sanjay Datta, chief-underwriting, claims and reinsurance, ICICI Lombard General Insurance said that there are certain essential parameters that policy buyers must check when choosing the right insurer. The parameters are: the company’s financial strength, company reputation, claim payment accuracy, and the ease of doing business, such as 24x7 customer service and online claim reporting. What’s more, while the price offered is a primary aspect to consider, the selection of an insurance partner should hinge on the quality and the strength of the underlying promise and the consistency in its performance. "It is consistently prudent to go with insurers that have a good lineage of products that are long-term in nature such as health insurance, automobile insurance, etc.," said Datta.

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