Term plan- buy online or offline?

Last Updated: Tue, May 13, 2014 05:55 hrs

"Pay Rs. 15 every day and insure yourself for 1 crore" or "get insured for as low as Rs. 12 per day", you come across these type of ads quite often if you are a regular internet user or google a particular type of insurance plan. Such low amount of premium really attracts a potential customer. But are the ads true?

myinsuranceclub.comYes, the ads are actually true. But there is a catch. Such low premiums are offered only on plans offered online. It basically means that if you buy online then only will you be signing up for such low premiums not through your agent. So where does that leave you?

In the good old days, buying insurance meant calling up your agent and dictating your needs. Your agent suggested the product, completed the proposal form and collected the premium while all the while you need not have moved a muscle. But, with increasing insurance competition among the private players and the advancement of technology, computers have changed the face of insurance. Be it policy details, plan features, company profile or even actually buying the plan, computers are the solution to everything. Online selling developed with the concept on online term plans. Term plans are the most basic plans and are being increasingly sold online offering the cheapest premium rates. This is because by buying online, the agent's commission is eliminated which lowers your premium cost. Attractive, isn't it? But before you jump on the bandwagon and decide to buy the online version of term plan, here are some factors that you must consider:

1) Plan details- just opting for an adequate cover is not enough. Term plans come in various varieties like increasing, decreasing or return of premium plans. So before you buy, check the details of the plan benefits properly.

2) Policyholder details- many people fear that policies bought online do not guarantee claim settlement. Although, claim settlement ratio of online plans is painfully low, they are because the customer often distorts personal information like medical history or health conditions. Insurance policies are issued on utmost good faith and it is imperative that you provide all the correct information to the company while buying the plan to prevent claim rejection.

3) Claim settlement- while your agent helped you in claim settlement process, bear in mind that by buying online insurance, you are eliminating the agent's services and will have to take care of your claim settlement process yourself. So, it would be beneficial if you thoroughly understand the process to initiate and receive your claim.

4) Technical jargon- insurance is a highly technical contract and as such there will be certain terminology that would escape your understanding. Before tying to buy any online plan, understand the jargon which you would face before you answer the queries blindly. His would avoid any future hiccups.


So, to conclude, the attractive low rates offered by online term plans are surely a deal clincher however, care must be taken to fill in the necessary details asked by the insurer. If you feel that you can take care of regular premium payments and the claim settlement process, online plans are a boon to you. But those who are hugely dependent on their agents to collect their premiums and settle the claims should stay away from online plans. Though premiums are lower, your policy would entirely be serviced by you.

Insurance is a long term contract and just a few initial clicks may get you a new plan, but maintaining it would be your responsibility. So, jump on the online bandwagon if, and only if, you are responsible enough to serve your own plan. The commissions paid to agents, though burdensome, are worthy for the pain they take to provide you service, isn't it?

Written By:  Deepak Yohannan
The author is the CEO of MyInsuranceClub.com, an online insurance price & features comparison portal

Deepak Yohannan


The author is the CEO of MyInsuranceClub.com, an online insurance price & features comparison portal

For more articles by Deepak Yohannan, please visit MyInsuranceClub.com

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