Life insurance is an important financial instrument in a human life, because due to the loss of one’s life the money will help their family in various ways. A life insurance policy is one of the few investment options that provide financial security to the people along with maturity benefit, including tax benefits. Even though having these much of benefits, the primary objective of life insurance is to provide financial security or income replacement for their family in the event of life insured’s death. Human life is made up of the happening of unexpected and uncertainties. So, it is very important to choose life insurance company to insure them. Claim settlement ratio is one of the important factors that will help you to find the right insurance company. In this article, we shown the review of Life Insurance Corporation of India claim settlement ratio in the financial year of 2018-19 and also provide comparison of last 5 years claim settlement ratio.


Life Insurance Corporation of India was created on 1st September 1956, with the objective of spreading insurance much more widely. Particularly, in rural areas with a view to reach all insurable persons in the country and to provide adequate financial cover at a reasonable cost. The company is an Indian state-owned insurance group and investment corporation owned by Government of India.

Formation of LIC

LIC was formed after the Parliament of India passed the Life Insurance of India act on 1956. At the time of formation of LIC, apart from its corporate office, the company had 5 zonal offices, 33 divisional offices and 212 branches.

Since, life insurance contracts are long term contracts and that requires variety of services for the currency of policy. Later, re-organization of LIC took place and large number of branches opened and the servicing functions are transferred to respective branches to made the process simple. As a result, that makes wonders in LIC, about to get 200 crores of new business and also crossed 1000 crores during the year of 1969-70.

Hence, today LIC functions with 2048 fully computerized branch offices, 113 divisional offices, 8 zonal offices 1382 satellite offices and corporate offices.


LIC’s wide area network covers 113 divisional offices and connects all branches through a Metro Area Network. Currently, LIC has ties up with 12 public sector banks, 6 private banks, 18 reginal rural bank, 41 co-operative bank, and 1 foreign bank.

The company also having 64 corporate agents & 83 insurance marketing firms were appointed. By using those banks and corporate agents tie up LIC can reach maximum people in the country to sell and provide coverage for them.

Apart from the corporate agents, financial advisors (individual agents) playing a major role in the growth of LIC. The company having 10,69,816 number of active agents as on 31st March 2019. With the help of these agents LIC could serve all remote areas across the country.

Claim Settlement Ratio of LIC

Claim settlement ratio is defined as number of claims settled to the insured against the number of claims filed to the insurer.

CSR = (Total no of claim paid in a financial year) / (Total no of claims received in a financial year)

It is an important factor while choosing the life insurance company to insure. Higher the claim settlement ratio indicates the better insurer to insure.

The claim settlement ratio of Life Insurance Corporation in the financial year 2018-19 is 97.79%.

[caption id="attachment_3412" align="aligncenter" width="595"]Claim Settlement Ratio of LIC Claim Settlement Ratio of LIC[/caption]

Claim details of LIC

LIC Claim Settlement 2018-19

Claims pending at the starting of FY 569
No of claims intimated in FY 2018-19 750381
Total No of Claims 750950
No of Paid Claims 734328
No of Unclaimed Claims 9190
No of Claims Rejected 6641
Total Pending Claims 791

From the above details, Life Insurance Corporation of India settled 97.79% of death claims against the total number of claims received in the financial year of 2018-19

The company rejects totally 6641 claims in the financial year of 2018-19. The repudiation ratio of LIC is 0.89% and unclaimed claims with pending ratio is 1.21% in the year of 2018-19.

As per the details provided by IRDAI, LIC has paid 12871.92 crores of claim amount for 734328 claims against the total number of claims in the year of 2018-19.

Claim Settlement Ratio of LIC for last 5 years

To know the history of claim settlement is important before insuring in to the life insurance company. For that IRDAI provide annual report of insurance companies every year, that contains the complete financial status of an insurance companies and also the indicators like claim settlement ratio, solvency ratio…etc.

For all life insurance companies, it is important to maintain higher and consistent claim settlement ratio as per the IRDAI guidelines. Because, higher the claim settlement ratio indicates the better insurance company for the people to insure.

The details of Claim Settlement ratio of LIC for last 5 years are given below

Financial Year

Claim Settlement Ratio

2014-15 98.19%
2015-16 98.33%
2016-17 98.31%
2017-18 98.04%
2018-19 97.79%

The graphical representation of LIC’s claim settlement ratio for 5 years is given below.

[caption id="attachment_3413" align="aligncenter" width="589"]Claim History of LIC Claim History of LIC[/caption]

From the above graph clearly indicates the stability of Life Insurance Corporation of India towards settling the claims to their customers year on year. Even though the company receiving a greater number of claims intimated in a financial year, the company maintain their trust by providing the claim settlement on each and every year.

Review of LIC’s Claim Settlement Ratio

None of the life insurance company’s motive is to reject or holding the claim request received by them. It is people’s responsibility to honestly provide the details asked at the time of availing the insurance policy. Also, providing the required documents at the time of claim is important that it could avoid the claim pending.

As provided the data given above, Life Insurance corporation of India is maintaining their consistency in claim settlement to proving the trust to their customers. As we all know LIC is the only the insurance company owned by government of India. Here we concluded that LIC is a very good and most trustable company to insure.

Source : IRDAI

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