While buying insurance, it is important to keep in mind not only the premium and tax benefits but also the Claims Paid Ratio (CPR). It tells whether the insurance company will keep its promise in difficult times or not. Let’s know what is CPR and why it matters so much.
Whenever someone buys life insurance, most people focus on how much premium they will have to pay, how much tax exemption they will get and what is the death benefit. But one important thing that people often ignore is the Claims Paid Ratio (CPR).
This is such an aspect that decides whether your insurance company will stand with your family in times of trouble or not. So let’s know what is CPR and why one should pay attention to it while taking insurance.
What is CPR?
CPR tells how much money the insurance company actually paid out to the customers out of the amount of claims it received. For example, if a company received claims of ₹ 1,00,000 and paid out ₹ 75,000, then its CPR would be 75%. That is, just getting the claim approved is not enough, it is more important to know how much was actually paid.
What is the difference between CSR and CPR?
Now let’s come to CSR i.e. Claim Settlement Ratio. It tells how many claims out of the total number of claims were settled. Suppose 1000 claims came and the company approved 960, then CSR is 96%. But it is not told how many people got the full amount. This is just a game of numbers.
CSR gives the count but CPR gives the actual amount. So CSR may be good but CPR gives you the real picture of how much money people received.
Why is CPR important?
The purpose of insurance is to provide financial support to the family in difficult times. But if the insurance company does not pay at that time or pays only half of it, then what is the use of that insurance? Therefore, if the CPR is high, then the trust will also be high. This shows that the insurance company is really helping people and not just making promises on paper.
How was CPR in 2023-24?
According to the report of the Insurance Regulatory and Development Authority (IRDAI), the average claim payment ratio of life insurance companies in India was 96.82% in 2023-24. That is, the insurance amount was paid in about 97 out of every 100 claims.
Keep these things in mind while buying insurance
If you are thinking of buying insurance, then definitely check CPR and CSR. Also, read all the terms and conditions of the policy carefully, always keep the nominee’s information updated and whatever information you are giving should be complete and correct. Because wrong information or incomplete medical details become a big reason for stopping the claim later.
Taking insurance is not just buying a product, it is a trust. When times are bad and the family needs support the most, your insurance is not just on paper but is useful, this can be ensured by looking at CPR.
