IRDAI's New Rule: Does Your Claim Pay 100%?

IRDAI wants insurers tracked on how much they actually pay out, not just how many claims they approve. A 'settled' claim that pays ₹2L against a ₹5L bill is not a win for you.

Here's what happened: IRDAI's chairman has directed insurers to shift focus from claim settlement ratios to actual payout amounts — how much of your claimed sum is really paid.. The regulator believes the widely advertised 'claim settlement ratio' misleads buyers because a partially paid claim still counts as 'settled' in current reporting.. IRDAI is working on proposed reforms to reduce mis-selling by making payout transparency a compliance requirement, not just a voluntary disclosure..

What you should do: Ask your insurer or agent for the 'claims paid ratio' — the rupee payout as a percentage of total claimed amounts — before buying or renewing any health or life policy.. Check your existing policy for sub-limits (room rent cap, disease-wise limits, co-payment clauses) that reduce your actual payout even on an approved claim.. Compare policies on IRDAI's Bima Bharosa portal or insurer annual reports where gross claims paid vs. claims reported data is available publicly..

A policy with a slightly lower settlement ratio but higher average payout per claim protects your wallet more than one with a 99% CSR that caps room rent at ₹2,000/day in a ₹8,000/day hospital.

If you're considering settling a loan, our loan settlement guide walks through the process.