People have this big question: Should you avail a term life insurance plan online or offline? This is mainly because insurers have started introducing online term insurance plans at lower premiums. You could save a lot of money if you avail an online term insurance plan.
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Before choosing something as important as a Term Life Insurance plan, you need to make an informed decision. Let us take a look at a few pointers which bring out the differences in online and offline term insurance.
When you avail an online term life insurance plan, you get complete access to company details. You can collect first-hand information on the product directly from the website. There are a number of online aggregators who allow you to compare quotes, policies and reviews on policies offered by different insurers.
However in case of an offline term insurance plan, you tend to rely on the agent and don’t get accurate information. Therefore, chances of mis-selling are high.
Online term insurance plans are 30-50% cheaper than offline term insurance plans. An online term insurance can be availed by visiting the life insurer’s website. Life insurance agents are not involved, which make premiums cheaper than offline term plans.
Offline term insurance plans are availed through agents. Agents charge a commission for services like premium collection, medical test co-ordination, policy servicing and so on. So, offline term insurance is more expensive when compared to online term insurance plans.
In online term insurance plans, you need to fill out all relevant details yourself. Hence, there is no chance of skipping or missing any information. Insurers get all the information they seek.
In offline term insurance plans, individuals often depend on the agent to fill the insurance proposal form. Agents may miss out on some details or information. Even if your application is accepted, non-disclosure of facts in the proposal form can lead to rejection of the claim at a later time.
To safeguard the interests of the insured, IRDAI laid down certain guidelines stating that no insurer can reject claims on the basis of non-disclosure of facts, 2 years after the policy has been availed.
Online term insurance plans have low premiums for the same sum assured, when compared to offline term insurance plans. Offline term insurance plans come with high premiums. Insurers offer online term insurance plans with sum assured ranging from Rs 5 Lakhs to Rs 5 Crores and beyond. Therefore, individuals tend to avail an insurance plan with higher sum assured.
Individuals who want to buy offline term insurance plans tend to avail term insurance plans with a low sum assured as they will have to spend more on premiums.
Claim settlement ratio is an important pointer in an insurance policy. Higher the claim settlement ratio, higher are the chances that your claim will be awarded and vice versa. When you buy an online term insurance plan, every insurer’s website mentions their claim settlement ratio on the first page. This is to catch the attention of the readers who could be potential customers.
On the contrary, in case of offline term insurance policies, you have to rely on the agent to decide on an insurance policy. The agents’ main motive is to earn commission. They wouldn’t care to explain to you, the claim settlement ratio.
Online term insurance plans are more flexible than offline term insurance plans. After researching the available plans, all you need to do is visit the insurance company’s website, pay the premium and receive the policy documents at the home address. If you have any major disease, the insurer will seek a clarification. Most insurers also exempt medical tests on policies of Rs 50 Lakhs or less, subject to age criteria.
In case of offline term insurance, the applicant has to visit the insurance company a few times. You may also have to undertake certain medical tests even for a low sum assured.
Offline term insurance policies have many riders like permanent disability, partial disability, critical illness and so on.
Now that you are aware of the differences between the online and offline term insurance policies, you can decide what’s best for you. Though you can save a lot on premiums in case of online policies, these are not very favorable when it comes to rider benefits. However, individuals availing more than one policy can take the advantage of lower premiums on online term policies.
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