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17 October 2016
Online Term Insurance Plan
With the internet becoming a routine of our life, the number of net-savvy insurance buyers is gradually
increasing. Non-life insurance products such as personal accident, health, motor and travel have fuelled the
growth of online insurance products. Now, while a similar trend is yet to gain substantial momentum in life
insurance, online term insurance plan have been in particular gaining popularity. As per the statistics, one
online term plan is bought every 5 minutes in India! The online quote systems and price comparisons on portals
like trucompare facilitate the insurance buyers to buy a term plan easily and as best suited to their needs.
Aegon Religare was the first insurance provider to introduce an online term insurance plancalled ‘i-Term’.
Today, almost every insurance company from LIC to MaxLife insurance offer online term plans.
Now, if you are wondering if you should buy an online term insurance plan, how safe it is compared to an
offline version and what is the process, here is a complete guide to simplify your decision.
Reasons to Buy Term Insurance Plan
1.Convenient and Quick: One click, anywhere and anytime buying –that’s what anonline term insurance
plan is about.
You can do term plan comparison – browse, research and compare the quotes, features and benefits of the
online term insurance plans instantly across the websites of different insurance providers.
You really don’t have to contact or follow up with any insurance advisor(s) or fear misselling of any kind.
You can scan and submit the KYC documents.
You can pay premiums by choosing any of the multiple payment methods available – credit card, debit card, net
banking and even IVR (Interactive Voice Response).
The policy is processed and issued quickly, so your life cover does not get delayed much.
You can renew the policy online as and when the premium due or if it lapses.
2.Cheaper Cost: The premium of online term insurance plans is about 30 – 40% cheaper than the offline plans.
There is a misconception pertaining to economical cost of online term plans, though. Most customers believe
that lower the premium, the higher is the probability of a claim rejection or that there is some catch. Well, that’s
not true. There are several reasons why online term plans are more affordable. First, there is no agent
commission or channel sales cost involved in the pricing. Second, insurers consider an online customer a low-
risk profile – he is educated, earns well and prefers to take a life cover. Third, since an online transaction is
paperless, the processing and administration cost also comes down significantly for the insurer.
3.Transparent Process: One of the major problems that an offline insurance buyer faces is transparency – right
from meeting(s) with the advisor to filling up the form. You usually rely on the advisor’s advice to understand the
key offerings of the plan. There are also chances that your personal details could be misspelled or mentioned
incorrectly in the physical form. Whereas, in an online plan, you would be doing all the formalities on your own.
You have all the information at hand to make a sound decision. There is a step-by-step procedure to guide you,
so the error rate is considerably low.
1.Lack of Human Touch: If you are someone who prefers the face-to-face support and advice for before (buying)
and after (premium payment reminders, claim settlement, etc.) insurance, you may not be comfortable buying an
online policy. However, you must also note that the most advisors do not stay for long with one single insurance
company. So, if you think that the advisor who sold you policy will stay with you till the end of the policy term
(unless he is someone who you know personally), you are mistaken! The good side is that you really don’t need
an advisor’s help to buy an online term insurance plan for the reasons stated above. These days, insurance
companies send automated text and email status updates / reminders for your policy. And to ensure that the
claim settlement procedure is hassle free for the nominee(s), it is advisable to choose a reputed insurer with the
best claim payout ratio.
2.Insurance Lexicon: While applying for an online term plan, you may not understand the insurance wordings
on the website. You may have to either dig up more information from the internet to comprehend their meaning
or rely on the insurance provider’s customer support service.
HDFC Life: plan, you would be doing all the formalities on your own. When you log on to HDFC Life website, you would be first requested to choose sum assured, policy
term and premium paying term followed by your personal details such as age, gender and smoking habit. After
your premium is calculated, the next page will take you to an online application form, which would cover more or
less same details as any other insurance provider. On successful completion of the transaction, you will get an
acknowledgement and further procedure of issuance will be undertaken.
Buying Tips plan, you would be doing all the formalities on your own.
Buying online term insurance plans is reliable and safe as long as you chose the right insurer and the right
plan. But, you should also keep a few important points in mind to ensure smooth processing of your application
and effortless claim settlement process for the nominee(s).
1.Understand the plan If required, consult your family, friends or an expert. You must also do term plan
comparisons to make the right decision.
2.If you are using a comparison site to seek information, you should verify the information for its relevance and
3.Read all terms and conditions on the website carefully, especially the ones in the fine print.
4.Do remember that most claim rejections result from non-disclosure, incorrect or misleading information. In order
to ensure that the nominee(s) does not face any problem in the event of a claim, a precaution at your end while
buying a plan is of the utmost importance. You must behonest about your disclosures. For example, you
should mention your smoking or drinking habit. Or, if you have any previous life cover, that should be too
declared. You may have to pay a higher premium, but it is worth your peace of mind.
5.The browser page address line should show a secured connection. That is, it should start with ‘https’ instead
6.Before making a payment, ensure that the website has Secure Sockets Layer (SSL) certificate so that your
transactions are safe and secure.
7. plan, you would be doing all the formalities on your own. Save the acknowledgement or reference number of the transaction, whether it was successful or
unsuccessful. Ideally, keep a screenshot of the transaction page. This will act as a record till you receive the
policy document by courier.
Post – Buying Tips
Your responsibility does not end after buying an online term plan. You have to consider following factors too.
1.As soon as you receive the policy document, read it thoroughly to verify that your personal and policy
details (sum assured, term, premium amount, etc.) are correct. You must also read the terms and conditions as
well as exclusions.
2.You have a right to return the policy to the insurer in the following circumstances.
There is any mistake in your personal or policy details. The insurer will rectify and send a new policy document
There is a freelook period of 15 days from the date of receipt of the policy document. In case you are unsatisfied
with the plan, you can return the policy document within this period and claim a refund of your initial premium.
3.If the policy document is in order, show it to your spouse, parents, any other responsible family member or
the nominee(s). Explain them the reason why you have bought a term plan and educate them on the features
of the policy. You should also describe how a claim settlement process works and where and how to contact the
insurer as and when such an unfortunate situation arises.
4.Keep the policy document in a safe and a secure place. At the same time, it is also necessary that your
family members or the nominee(s) know where it is kept and how to access it.
5.Don’t forget topay premiums on time! What’s the use of a term insurance policy if it lapses and can’t serve the
benefits it was taken for? You have an option to renew the policy, however, the insurer may ask you to undergo
a medical test. And, if the medical test reveals an unfavourable health condition, you may have to pay a higher
premium or your policy may not get renewed. These are the reasons why timely payment of premiums is
Remember, that you are buying a term insurance plan for the financial security of your family. Online term plans
are convenient and cheaper to buy. But, these alone should not be the decisive criteria. Choose an online term
plan which meets your financial goals and gives you peace of mind.
Source : https://goo.gl/xZHNmR