What is Solvency Ratio in Term Life Insurance

Solvency Ratio in Term Life Insurance

Are you planning to buy a term insurance policy? Don’t forget to check the solvency ratio of your insurer. If you want to know more about it, read the post.

If you want to secure your family and your loved ones, buying a term insurance policy, which is a pure life insurance, is one of the best options. With a term plan, a person can assure the financial stability of his/her family in the event of a sudden demise of the bread earner. Since it plays an important role in the life of your family members, a term plan should be chosen with great care and detailed research.

Here, one key aspect to take note of at the time of buying a term insurance plan from an insurance company is to check the reputation of the company. The reputation of the company is a major factor and it is called the Solvency Ratio of term insurance providers. This factor decides the reputation of the company and if the company can pay the insurance amount to your family in case of your sudden demise.

Let’s understand this in more detail.

What is the Solvency Ratio of Term Insurance providers?

In simple words, the Solvency Ratio computes the funds or the cash flow of the insurer and their liabilities. Thus, it helps the insured to understand if the insurer has enough funds to comply with its liabilities.

If the solvency ratio is low, it means that the insurer is not able to manage its monetary obligations and default payments well. And a high solvency ratio means the insurer has enough funds to manage all of its financial obligations.

So, imagine you bought a term insurance plan from a company with a high solvency ratio insurance to support your family financially. Now, let’s say there was a sudden natural disaster like an earthquake that caused the death of many people. Now, the insurer is flooded with death benefit claims. In such a case the insurer should be capable of paying insurance benefits to all such families who raised authentic claims for their term life insurance.

Can we calculate Solvency Ratio? How?

Yes, a Solvency ratio formula is there that can be used to calculate the ratio, which is:

(Total Income + Depreciation) divided by Liabilities is equal to Solvency Ratio.

The above formula help to measure the funds of an insurance company as compared to the total funds of the company that is owned as sum insured. If the company has more assets as compared to its liabilities, the ratio of solvency remains high.

Is Solvency Ratio of Term Insurance Companies important? Why?

A Term insurance policy offers monetary protection to the family of an insured individual in case of unfortunate death of the policyholder.  So, as a policyholder you buy a term policy and agree to pay the premium of the policy regularly. Similarly, the insurer agrees to cover your life and financially secure your nominee in case of a sudden event. Further, the insurer agrees to pay death benefit to the family of the insured as per the agreed sum assured at the time of buying the policy.

However, you must understand that an insurance company receives several claims on a daily basis from customers . And to offer death claims to all their customers, the company has to be financially stable. So, it is important that the company has enough funds to support the claims of their customers. Thus you need to know the solvency ratio of insurance companies.

Solvency Ratio enables the insured to find out the financial condition of the insurance company to see if the company is strong enough to pay for claims. This way, you can be sure that the insurer you are trusting your family’s financial needs with, would pay back to them the sum assured amount on your demise.

Read More: What Happens if the nominee of a Term Insurance Plan Dies?

What does IRDAI  direct about Solvency Ratio?

From the above discussion it is clear that Solvency ratio plays a crucial role that requires consideration at the time of buying a term insurance. Looking at the importance of solvency ratio, IRDAI has made it compulsory for every insurance company to have a solvency ratio of 1.5 along with a solvency ratio margin of 150%. Thus, this is considered a safe margin of solvency.

Now, what is the solvency margin? Solvency margin is the added capital that an insurance company is required to possess in addition to the death claims that the company is likely to incur. This extra fund acts as a monetary support that allows the insurer to pay off death claims in extreme cases.

Each Quarter, the IRDAI issues the solvency ratio in the months of March, June, September and December.

To Conclude

Now that you know the solvency ratio meaning, you know that while buying the best term insurance plan in India, it is extremely essential to check the solvency ratio of the insurer. You can check the solvency ratio in the IRDAI website where the solvency ratio of all insurance companies is provided. Thus, it helps you to make an informed decision while buying the policy.
Found this post informational? Browse PayBima Blogs to read interesting posts related to Health Insurance, Car Insurance, Bike Insurance, Term Life Insurance and Investment section. You can visit PayBima to Buy Insurance Online.

 

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All You Need to Know About the Annual Medical Check-ups in Health Insurance Policy

Annual Medical Check-ups in Health Insurance Policy

Do your health insurance plans offer annual medical check-ups? Know all about the free yearly medical check-ups available with your health insurances in this post.

Taking care of your health by regularly going for check-ups is essential, especially to timely detect an ailment.  Moreover, after a particular age it becomes all the more important to have regular medical tests.

Healthcare Experts are of the view that everyone must go through a precautionary health check-up once in a year. However, many people consider these health check-ups unnecessary wastage  of money. But the fact is health check-ups are very important and everyone should get a health check-up done regularly.

Those who have health insurance can easily avail the facility of undergoing such health check-up every year without spending any extra amount. This is because most health insurance policies offer free health check-ups once a year. Lets learn more about this offer in this post.

What is an annual preventive health check-up available with your health insurance policy?  

Many health insurance plans offer the benefit of yearly health check-ups under which the insured can avail one preventive health check-up absolutely free each year to keep a track of his/her health. This way, the insured can evaluate their current health condition and can reduce the risk of getting any serious illness. Such preventive health check-ups are done on all body parts including heart and other organs of the body. They also  watch for other parameters of health like blood sugar, blood pressure, etc. On top of that you get free doctor consultation to suggest different measures to prevent diseases and allow the policyholder to lead a healthy life.

Now, you would be interested in knowing what all tests are covered under such health check-ups. So, below are some of the common tests that are covered under the annual health check-up allowed by your best health insurance plan.

Tests Covered under health Check-up 

Along with regular physical examination, the other common tests covered include blood sugar and blood pressure. Also, they include urine and CBC or Complete Blood Count tests under the annual medical check-up. Further, these tests include:

• Examination of Kidney functions along with lung and liver function
• Checking your Lipid profile
• Your vitamin deficiencies are also checked
• For women it include tests like Pap smear
• It also includes X-ray, ECG and Sonography etc.

4 Advantages in buying a Health plan with yearly preventive Check-ups

Here are some of the benefits of buying best health insurance in India which offer yearly health check-up options:

1. They help you to keep track of your health and fitness –  It allows the insured to observe their overall health on a regular basis.  It helps in keeping a check on the proper functioning of various body organs and thereby track their wellbeing.
2. They enable you to detect diseases at the early stages –  Another benefit of regular body check-up is that it allows early diagnosis of ailments and helps the patient to curb the spread of the disease at early stages with the help of right treatment.
3. They support people to live a Healthy Life – Since regular body check up keeps the insured updated about their present body conditions, they find it easy to opt for healthy steps so that they can enhance their fitness, and improve their health conditions.
4. These check-ups help the insured to save money – With a health policy that allows you to avail free yearly medical check-ups,  you can save a lot of money. This is because you can get the health check-up done free of cost and if the tests detect an ailment, you can control the disease from spreading and avoid expensive treatment like surgeries etc.

Do all health insurance plans offer Annual Medical Check-up Facility?

No, every health insurance plan doesn’t offer a health check-up facility for its policyholders on a regular basis. In fact, some plans don’t offer this facility altogether. On the other hand, some of them might provide the free health check-up every two, three or four years.  Further, other limitations are also set by different insurers depending on the plan. For instance, some plans allow medical check-up after a certain number of successive claim-free years. Thus, it is important to read the terms of the policy before buying a plan.

Read More: How Can You Get Free Medical Check-Ups Under Your Health Insurance?

5 Things to consider when buying Health Insurance offering free Health Check-ups

Here are the things to consider:

1. You must ensure the frequency of Health Check-up so that you know if the policy offer annual medical check-up or after every few consecutive years
2. There are many policies that allow free health insurance for medical check-up only after a certain number of claim-free years. So, you need to check that before buying a policy
3. You also need to check if your health insurer allows your annual health check-up on a cashless basis. And if so, which hospitals – network or non-network – are available for conducting the tests. Availability of all hospitals is better as compared to only network hospitals.
4. The insured also needs to check the list of medical tests covered under their free health check-up so that you come to know if the policy is covering the important medical tests or full body medical check-up.
5. Also, you must make sure if the policy allows tests on the basis of sum insured. Because there are some policies that allow tests depending on the amount of sum insured. Don’t go for a sum insured you do not need just for the sake of free health check-up as it adds to the premium.

To Conclude 

Annual health check-ups are good ways to keep track of the health of a person. By availing a health insurance policy offering annual health check-ups, you may not worry about expenses of getting your health check every year. So, if you want to find the best health plan with free annual check-up, just search for ‘annual medical check-up near me’ and keep the above mentioned points in mind before buying a policy.
Found this post informational? Browse PayBima Blogs to read interesting posts related to Health Insurance, Car Insurance, Bike Insurance, Term Life Insurance and Investment section. You can visit PayBima to Buy Insurance Online.

 

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