LIC has the best claim settlement ratio when it comes to term insurance. Although IRDA doesn’t publish term insurance claim ratios separately, in 2013-14, LIC had a claim settlement ratio of 98.14%. You can check the historical claim settlement ratios for all term insurance companies by getting a quote.
In private sector insurers, HDFC Life, Max Life and ICICIPru Life have the best claim settlement ratios in the industry. Any good insurance company will have its claim settlement ratio greater than 90% or the last 2-3 years. Therefore, while selecting term insurance you should not only look at the premiums but also look at the claim settlement ratios.