Online term insurance plans, in recent times, have gained considerable popularity. Marketed as a quick and cost effective life insurance option by almost all major insurance companies, online term plans are definitely here to stay. What do these plans actually have in store? Here is a quick look at the pros and cons of buying a life insurance online versus a conventional term plan.
A Quick Glance- What Are Online Term Plan?
Online term plans are an option where you get to buy an instant life cover, by making an online application on the insurance company’s website. Very similar to conventional term plans in their working the only difference being, the whole process does not have any agent or sales executive involvement. So you could buy a term plan, from the convenience of your home or office, at anytime you choose, 24/7.
Advantages of buying life insurance online
- Cheaper than conventional term plans: As the entire buying process is devoid of any agents or commissions, the cost of the plan works out to be much cheaper than traditional plans.
- Hassle free process: The entire buying happens online and all details are entered on the website. The web interface of the plan is simple and user friendly. No lengthy application forms need to be filled.
- Transparency in price structure: The plan details and price structure is transparent and clearly mentioned online. Investors could do a comparison among other insurers before taking a plunge.
- No pushy agents: Pushy sales executive may often convince you, against your will, to buy a policy. Buying online means no such pushy executives and you will not be obliged to buy a policy because an agent tells you to do so.
What to watch out for?
- Not entirely online: Though called online insurance policies, the entire process is not done online. After making the payment online, you would be required to give a medical test. Medical tests are generally not required for individuals less than 45 years of age. However, depending on the general medical condition of the individual and the value of the sum insured, a medical test may be required. You would also need to complete KYC norms and submit collect proofs for identity, address and income at the nearest centre of the insurer, or have a representative of the company collect it from you.
- Technical issues: The most commonly faced technical issue is with regards to browser compatibility. A few of the online buying web pages may be compatible only with Internet Explorer browser.
- Available only in select cities: Online plans are not available in all cities. Most insurers have a restricted list of cities where the product is offered. You may not be able to buy these policies online if you are staying in a place not mentioned in the insurers list. Some insurers such as ICICI Prudential Life Insurance provide let investors buy in an offline mode through agents for an additional charge of Rs 100 to Rs 500.
- Lack of riders: Most online term plans do not offer any riders with their plans.
- Lack of assistance: Not having an agent involved in the buying process has its drawbacks too. When buying a traditional insurance policy, the agent ensures all the information is filled correctly and accurately. However in online insurance you have to fill in the application yourself and submit the application online. Since you would be completing all formalities by yourself, in case a problem arises at any point, you would have to get in touch with the insurers customer care centre and explain your problem each time.
Whether you are buying your policy online or offline, the cover and claim settlement is predominantly determined by the authenticity and accuracy of information that you would be providing. Do not hide any facts regarding medical condition, pre-existing diseases etc…
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