Life insurance policies have always been a popular financial choice, considering how they financially safeguard a family’s future in the unfortunate event of an individual’s absence. Subsequently, a few insurers gained an evergreen name in the industry, and SBI Life Insurance is one of them. While the provider is mostly famed for its brand equity, its years of experience in the industry are attributed to its long queue of products that are meant to cater to the diverse financial requirements of potential policyholders. From protection plans, saving plans, child plans, retirement plans, money-back plans, and endowment to ULIPS - the brand offers it all.
However, the trusted brand name only goes so much when you are analysing its credibility. Before you purchase a life insurance product from this insurer, you need to evaluate its true credibility (based on a few metrics), look into its policies, and then compare these plans against others in its categories from different top-notch life insurance providers. This will help you land the best possible life insurance plan that is financially aligned with your requirements.
| Pros | Cons |
|---|---|
| Decent Claim Settlement Ratio | Non-Comprehensive plans |
| Good Amount Settlement Ratio | |
| Good Complaint Volume |
Metrics of SBI Life Insurer
SBI Life started its operations in 2000 as a joint venture between the State Bank of India (SBI) and French financial institution BNP Paribas Cardif. The brand name has substantially attributed to its sizeable client base. Unfortunately, the brand’s origin as a publicly owned company and the lack of comprehensiveness in its policies have made the insurer a less preferred option, especially considering the value-worthy life insurance and term insurance policies extended by other top-notch insurers.
Now, since life insurance products often involve a lump sum as a cover amount, it is only obvious that policyholders will seek an insurer that is credible and avail of plans that come with lucrative features and valuable riders. So, let’s explore to find out if SBI Life Insurance is a credible life insurance provider by taking a look at 3 metrics - Claim Settlement Ratio (CSR), Amount Settlement Ratio (ASR), and complaint volume.
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Claim Settlement Ratio of SBI Life Insurer
When selecting a term insurance provider, a crucial factor to consider is its Claim Settlement Ratio (CSR).
This ratio is calculated by dividing the total number of claims settled by the insurer in a year by the total number of claims received by the insurer in the same period, then multiplying the result by 100.
Since life insurance policies typically involve substantial sums assured, it's important to choose an insurer with a strong track record in settling claims and ensuring a high proportion of claims are paid out. Therefore, it's essential to review the insurer's CSR.
Ideally, a CSR above 97% is desirable. However, it's prudent to also examine the industry average over the past three years and aim for an insurer whose CSR surpasses this average. Additionally, analysing the insurer's CSR for the previous three years will provide insights into its consistency in claim settlement performance.
| Years | CSR for SBI Life Insurance | Industry Average |
|---|---|---|
| 2020 - 2021 | 93.09% | 97.49% |
| 2021 - 2022 | 97.05% | 97.50% |
| 2022 - 2023 | 97.26% | 98.34% |
| Average (2020 - 2023) | 95.80% | 97.74% |
Insight: The SBI Life Claim Settlement Ratio has improved over the years, starting from the lower 90s and continuing to stay in the higher 90s, 97+. This is a great sign for its existing and potential policyholders.
Amount Settlement Ratio of SBI Life Insurer
Life insurance plans often involve a significant sum assured. To game the Claim Settlement Ratio numbers, an insurer can easily settle lower claim amounts and ignore those with a higher cover amount. In such cases, you may be misled into believing that an insurer has an incredible claim settlement track record, while the truth is far from it.
To avoid this, you need an insight into not just the number of claims settled but into the amount settled as claims. This is easily achievable if you take a look at the Amount Settlement Ratio numbers that are given by -
(total amount of claims settled / the total amount of claims filed to the insurer over a single year) * 100
An insurer with an ASR of 90 and above is good to go. This also sheds some light on the financial stability of the insurer and gives an idea about the provider's potential for future claim settlement.
| Years | ASR for SBI Life Insurance | Industry Average |
|---|---|---|
| 2019 - 2020 | 89.7 | 90.8 |
| 2020 - 2021 | 86.2 | 91.2 |
| 2021 - 2022 | 94.6 | 90.6 |
| Average (2019 - 2022) | 90.2 | 90.9 |
Insight: The ASR numbers for the last 3 years rarely surpass that of the industry average (year-on-year). This is a bit concerning for a life insurer that’s as reputable as SBI Life Insurance. Across the 3 years, the brand crosses the threshold of 90 only once and hence falls behind of the industry average for the last 3 years.
Complaint Volume of SBI Life Insurer
When purchasing a term insurance plan, you must look into the complaint volume of an insurer. Considering that complaints lodged by clients are almost always about the hassles involved in settling claims or delays in the claim settlement process, the complaint volume metrics will give you an idea of the insurer’s overall operational proficiency.
| Years | Complaint Volume for SBI Life Insurance | Industry Average |
|---|---|---|
| 2020 - 2021 | 2.4 | 67.6 |
| 2021 - 2022 | 3.0 | 76.5 |
| 2022 - 2023 | 5.9 | 65.3 |
| Average (2020 - 2023) | 3.8 | 72.8 |
Insight: While it’s true that SBI Life’s complaint volume has been steadily increasing over the years, the numbers have managed to stay pretty low as compared to the industry average. Its current average complaint numbers are again one of the lowest in the industry. However, we would much prefer to see a drop in its complaint volume over the years.
Offered Riders in SBI Life Insurer’s Term Insurance Plans
SBI Life Insurance has a few popular term insurance policies that come with a set of value-worthy riders. Here is a look at them -
| Benefits | eShield Next | Smart Shield | Grameen Bima |
|---|---|---|---|
| Waiver of Premium | ✘ | ✘ | ✘ |
| Accidental Death Benefit | ✔ | ✔ | ✘ |
| Critical Illness Rider (list of ailments) | ✘ | ✘ | ✘ |
| Total and Permanent Disability Rider | ✔ | ✔ | ✘ |
| Hospi Care Benefit | ✘ | ✘ | ✘ |
| Life Stage Add-On | ✘ | ✘ | ✘ |
Term Insurance Plans Offered by SBI Life Insurer
- SBI eShield Next
This comprehensive term insurance policy provides broad coverage and various additional benefits. It's cost-effective and offers more than just the basic death benefits, including options for lump sum payments, monthly instalments, or a combination of both. Additionally, it includes benefits for terminal illness and life-stage advantages as standard features. The policy presents three choices - Level Cover Benefit, Increasing Cover Benefit, and Level Cover with Future Proofing Benefit.
As riders, you can opt for either or all 3 of these options - Better Half Benefit, Accidental Death Benefit Rider, and Accidental Total & Permanent Disability Benefit Rider.
Drawback: The policy has no critical illness perk and misses out on most other value-worthy term insurance riders, thereby preventing maximum customisation.
2. SBI Smart Shield
With coverage ranging from ₹25 lakhs to unlimited (based on the underwriters’ discretion), this plan is one of the most popular term insurance policies from the stable of SBI Life Insurance. This is one of the rare plans available in the market that caters to minors (entry age of policyholders can be as low as 5 years).
The plan offers a couple of customisation options via riders - Accidental Death Benefit Rider and Accidental Total & Permanent Disability Benefit Rider, and the policy has a couple of variants - Level Term Assurance and Increasing Term Assurance.
Drawback: The plan has no critical illness rider or waiver of premium add-ons, among others.
3. SBI Grameen Bima
This is a pure-term insurance policy with coverage ranging from ₹10,000 to ₹50,000. Needless to say, the policy's cover amount fetches a pretty low premium, making it one of the most affordable policies available. The plan offers the basic death benefit, but that’s it.
Drawback: The plan has no customisation options, considering it extends no riders. The coverage, too, is pretty nominal and hence does not cater to a wide client base with varying financial requirements.
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Conclusion
SBI Life Insurance Company may have a market presence owing to its brand reputation, and the data from the last 3 years for its credibility metrics (CSR, ASR, and complaint volume) isn’t half bad. However, when it comes to the term insurance policies extended by this provider, the plans lack comprehensiveness despite being affordable, have nil to minimal riders, and are missing out on some of the most common features that are present among the top-notch life insurance and term insurance plans.
So, unless you are an SBI brand loyalist, you might want to reconsider choosing SBI as your life insurance provider. You must compare term insurance providers and the best plans available in the market and choose an insurer and plan that’s affordable and value-worthy and offers you a host of riders that ensures maximum customisation.
