According to sectoral regulator IRDA, private insurance companies fared poorly in terms of settlement of death claims in 2012-13 as compared to state-owned LIC.

Insurance Regulatory and Development Authority said in its annual, "The claim settlement ratio of LIC was better than that of the private life insurers," reports PTI.

As per IRDA's data LIC had the best claim settlement ratio of 97.73 percent among life insurers in the country. Private life insurers' average settlement record was at 88.65 percent.

More often the reason behind the rejection of claims according to the insurers is the wrong information provided by policyholders in the proposal form or non-disclosure of facts.

The excuse that the companies give is that many policyholders leave the paperwork to agents. So, not only you should fill form by yourself you should also read the insurance product, before you ask your insurance advisor for the claim settlement record of the insurer.

The best way to avoid all the confusion is to visit the website of the insurance regulator and go through the industry data in order to make sure that the advisor doesn't make a fool out of you.

So, next time you buy a policy from insurance companies make sure that its claims settlement ratio of above 95 percent.