In a joint venture, TATA Sons (India's largest conglomerate) and AIA (one of the largest insurers in Asia-Pacific) established TATA AIA Life Insurance Co. Ltd. Founded in 2001, it is currently one of the leading life insurers in the country, offering a vast insurance portfolio, including term insurance, ULIPs, retirement plans, and savings policies.
TATA AIA provides comprehensive, value-worthy policies with customisable riders, making it a promising insurer with a well-founded and credible reputation. And their products are pretty solid too.
| Pros | Cons |
|---|---|
| Economic and comprehensive plans | NONE |
| Excellent Claim Settlement Ratio (CSR) | |
| Great Amount Settlement Ratio (ASR) | |
| Industry-best complaint volume |
Metrics of TATA AIA Life Insurer
Term insurance plans and life insurers have seen increased popularity in recent years due to the pandemic and growing concerns about the financial well-being of families in case of the breadwinner's death.
TATA AIA emerged as a leading private life insurance company during this surge in demand. Despite becoming a household name, we are assessing whether the insurer has maintained its earned reputation by examining key metrics used to evaluate the credibility of life insurers and gaining more insight into the brand's overall performance.
1. Claim Settlement Ratio
You must go through the insurer's claim settlement track record when purchasing a term insurance policy. Considering term insurance plans usually involve a substantial sum assured, a credible insurer with a smooth claim settlement history is a must.
In this respect, the Claim Settlement Ratio and records of the proportions of claims paid out will significantly help. CSR is calculated by
(total number of claims settled in a year by the insurer / Total number of claims raised to the insurer in a year) * 100
If you want to approach a top-notch term insurance provider in the country, we recommend that you opt for one with a 97% and above CSR.
| Years | TATA AIA Life Insurer | Industry Average |
|---|---|---|
| 2020 - 2021 | 98.02% | 97.49% |
| 2021 - 2022 | 98.53% | 97.50% |
| 2022 - 2023 | 99.03% | 98.34% |
| Average (2020 - 2023) | 98.53% | 97.74% |
Insight: TATA AIA has an above-average CSR, close to the industry's best. Such high CSR indicates the smooth claim settlement history that the insurer takes pride in. In terms of CSR, TATA AIA is one of the best term insurance providers in the country.
2. Amount Settlement Ratio
Say an insurer has 10 claims across the year.
9 of the policies had a sum assured of ₹2 crore each, while the last claim is of ₹10 crore. To keep its CSR score high, the insurer settles the 9 minor claims but rejects the 10th claim.
The CSR shows that the company settled 90% of its claims and gives the impression that it’s a credible insurer. However, you never come to know that the insurer neglected a claim due to its high sum assured, and you would be misled into trusting the insurer with a policy purchase!
To avoid such misleading decisions, look at your top insurers' Amount Settlement Ratio (ASR). The ASR is given by -
(Total amount of the claim settled/ Total amount of the claims filed) * 100
This will help you understand the claim settlement potential of the insurer for the current and future timeline. Any insurer with an ASR of 90 or above is good to go.
| Years | TATA AIA Life Insurer | Industry Average |
|---|---|---|
| 2019 - 2020 | 95.9 | 90.8 |
| 2020 - 2021 | 87.6 | 91.2 |
| 2021 - 2022 | 94.7 | 90.6 |
| Average (2019 - 2022) | 92.7 | 90.9 |
Insight: TATA AIA has an Amount Settlement Ratio that is far above the industry average. Moreover, the numbers seem to have increased exponentially over the years (apart from 2020- 2021, which is understandable considering it was the year when the pandemic struck). This speaks volumes about the life insurer's financial potential and future sustainability.
3. Volume of Complaints
One of the crucial metrics when determining a term insurance provider is its complaint volume. This volume will reflect the client's satisfaction towards the term insurer, and since complaints against an insurer are mostly about claim settlement, you, as a potential policyholder, need to be aware of the situation.
| Years | TATA AIA Life Insurer | Industry Average |
|---|---|---|
| 2020 - 2021 | 1.0 | 67.6 |
| 2021 - 2022 | 3.0 | 76.5 |
| 2022 - 2023 | 3.0 | 65.3 |
| Average (2020 - 2023) | 2.3 | 72.8 |
Insight: TATA AIA Life Insurer holds one of the industry’s lowest complaint volumes. Considering their CSR and ASR, this is no surprise. Such excellent scores across all its metrics have accurately made the insurer a popular and favoured recommendation in the industry for term insurance plans.
4. Offered Riders in Its Term Insurance Plans
For a term insurance provider to be considered credible and a favourite among policyholders, it is crucial for them to offer a variety of riders through their term insurance policies. As far as TATA AIA is concerned, the insurer provides 3 term insurance plans and a host of riders:
| Sampoorna Raksha Supreme | Maha Raksha Supreme | Sampoorna Raksha Supreme Vitality | |
|---|---|---|---|
| Waiver of Premium | ✖ | ✔ (In case of critical illness and if diagnosed with total permanent disability) | ✖ |
| Accidental Death Benefit | ✔ (Up to ₹2 crore) | ✔ (Up to ₹2 crore) | ✔ (Up to ₹2 crore) |
| Critical Illness Rider | ✔ (Up to ₹1 crore) | ✔ (Up to ₹1 crore) | ✔ (Up to ₹1 crore) |
| Total and Permanent Disability Rider | ✔ (Up to ₹2 crore) | ✔ (Up to ₹2 crore) | ✔ (Up to ₹2 crore) |
| Hospi Care Benefit | ✔ (Up to ₹40 lakhs) | ✔ (Up to ₹40 lakhs) | ✔ (Up to ₹40 lakhs) |
These riders enable maximum customisation of the plans to suit varying financial and medical goals. Additionally, these riders are considered the most value-worthy among the ones available in the market. The presence of all these riders across the 3 term insurance plans guarantees policyholders about the comprehensiveness of the policies.
Term Insurance Plans Offered by TATA AIA Life Insurer
- Sampoorna Raksha Supreme and Sampoorna Raksha Supreme Vitality
This is one of the flagship plans from the TATA AIA stable. The plan is
- Affordable and comprehensive,
- Offers extensive coverage,
- Has an in-built terminal illness perk, life stage benefits, top-up sum assured, and premium payment flexibility.
TATA AIA Sampoorna Raksha Supreme comes in 4 variants - Life Option, Life Plus Option, and Life Income Option, based on the variations across payouts. The plan offers a host of riders that include -
- Accidental Death Benefits: An additional lump sum amount is disbursed in case the death of the policyholder is a result of an accident.
- Accidental Total and Permanent Disability Benefits: If you are left totally and permanently disabled due to an accident, your insurer will offer you an additional sum over and above the base amount.
- Criticare Plus Benefits: A lump sum amount is disbursed if you are diagnosed with any of the 40 listed critical ailments. This amount is over and above the sum assured.
- Criticare Benefit: If you are diagnosed with any of the 40 listed critical ailments, the insurer will disburse an amount as a lump sum. However, in the case of this rider, the offered amount is a part of your base sum insured. If you are disbursed this amount during the final disbursal of payment, you should expect a reduced sum.
(The Criticare RIder is only available with the Sampoorna Raksha Supreme Vitality policy.)
Drawbacks:
- For Sampoorna Raksha Supreme: The minimum income eligibility of policyholders stands at ₹10 lakhs, which limits the policyholder pool. Despite these missing riders, the plan is still a solid pick from the TATA AIA stable.
- For Sampoorna Raksha Supreme Vitality: The sum assured is capped at ₹2 crores.
- Maha Raksha Supreme
TATA AIA’s Maha Raksha Supreme is a decent product, although it lacks comprehensiveness considering there’s a minimum income eligibility criteria of ₹15 lakhs per annum to avail of the plan. The policy is economical, has multiple riders, offers whole-life options (up to when the policyholder turns 99 years old), and has an in-built terminal illness cover up to 50% of the base coverage.
Much like Sampoorna Raksha Supreme, the riders for this policy include - Accidental Death Benefits, Accidental Total and Permanent Disability Benefits, Criticare Plus Benefits, and Criticare Benefits.
Drawback: The Maha Raksha Supreme plan starts from a ₹2 crore coverage, which limits the availability of the plan in most cases. Only policyholders with a minimum income of ₹15 lakhs per year are eligible for this policy.
| Income Eligibility and Minimum Sum Assured | Recommended TATA AIA Term Insurance Plan |
|---|---|
| Less than ₹15 lakhs per annum | Sampoorna Raksha Supreme & Sampoorna Raksha Supreme Vitality |
| More than ₹15 lakhs per annum & Cover of ₹2 crore or more | Maha Raksha Supreme |
| Cover of ₹2 crore or less | Sampoorna Raksha Supreme Vitality |
| Cover of more than ₹2 crore, but Income less than ₹15 lakhs per annum | Sampoorna Raksha Supreme with Riders |
| Cover of ₹2 crore or more & Income of more than ₹15 lakhs per annum | Maha Raksha Supreme |
Conclusion
TATA AIA is one of the best life insurers available in the market. The plans offered are comprehensive and pocket-friendly, and the insurer is accurately famed for its credibility. Such features have pushed TATA AIA and its term insurance products to our list of recommended policies.