Journey of Online Term Plans in India: Decoded
With the rise of insurance policy options available to a customer, deciding the best fit for your financial needs may require some research. A financially beneficial option that is gaining increasing popularity is a term insurance policy. Term insurance plans are a type of insurance plan that allows life coverage for a certain period or term against fixed payments of term plan premiums. They are simple life insurance policies that are beneficial as they provide a higher range for lower insurance premium rates than traditional policies.
You can purchase term plans both through online and offline mediums. In the age of digitization, it is of no surprise that people are increasingly choosing to use the online channel. However, the popularity of online term plans has only risen during the pandemic because of the greater emphasis on contactless buying and the need for better financial security. This article dives into how online term insurance works and weighs its benefits.
What Are Online Term Plans and How Do They Work?
Online term insurance policies are insurance plans that are offered for purchase on an online platform. The traditional offline mediums of buying insurance used to involve going through an agent, but now online term plans allow customers to deal with the insurance company directly. The relative ease of this method has resulted in more people showing interest in purchasing a policy.
The general procedure for online purchasing a term insurance plan in India will include filling in the customer’s details such as name, contact details, date of birth, income, etc. The customer can then choose the policy from the given options and decide on the available frequency. At this point, a detailed form may have to be filled with various listing details, including information regarding health, lifestyle, nominee details, etc. The customer will also have to furnish the required documents listed, and a medical test may apply in some instances. Upon verification of the proposal, the insurer may reject or approve your application. After approval, the company will send confirmation and policy documents to the customer.
What Are The Benefits of Online Term Plans?
1) Control Over Comparing Policies:
When people bought insurance offline, customers were introduced to the various policy options by their insurance agent. However, this information was limited to the agent’s affiliations and personal knowledge. Since customers can now compare multiple policies with just a couple of clicks, they can look through more options than ever before and choose a plan that best suits their needs. In addition, the customers are now in control of researching the best choice by reading through its reviews and other information.
2) Enhanced Transparency:
Traditional offline mediums of purchase involved agents who acted as a third party between the company and the customer, so the information available to the customer depended upon the agent. This reduced transparency as the agent could manipulate information motivated by personal gains. When a company sells its products online, it lists all the relevant product information and its terms and conditions. Customers can review this information on their own accord and make an informed decision.
3) More Affordable:
Online term plans are often cheaper because they don't involve a mediator. A mediator may be entitled to specific, additional fees, which may raise the cost of your plan. This may amount to a more significant difference over a period. Added to this, with the availability to compare more options, it is easier to look for the most affordable option that applies to you. It is still important to note that term policies differ and researching your options will help you make the best decision.
5) Convenient and Hassle-Free:
It is convenient for a customer to go through the entire process of purchasing the term insurance plan in the private and comfortable setting of their home. Most application steps will only require a few clicks and the customer can also choose to discuss any doubts with a professional from the insurance company. The lack of paperwork involved in buying an online term plan makes it suitable for the present times. The customer can check for all relevant details on the website and can even calculate their term policy online. Except in some instances, a medical examination is also more accessible in online term plans.
6) Good Claim Settlement Ratio:
Online term insurance plans provide a more straightforward claim settlement process for the customer. You can simply upload the documents on the portal after registering for a claim settlement on the insurer's website and complete the entire process at home. Upon verification of the claim, the insurance company will decide whether to process the claim. If approved, the company will disburse the claim. The claim amount can also be paid online, which makes it hassle-free for the customer.
Claim settlement ratios are also available online as well as customer reviews. Customers can check this information before buying the term insurance plan. For instance, Tata AIA Term Insurance Plan has a claim settlement ratio of 98.02% for FY 20-21.
Things to Keep in Mind When Choosing Online Plans
1) Do thorough research: It improves to have accurate information about the products and policies when researching your own. For example, many customers tend to overlook the period they are getting coverage for on their term plans because of cheaper rates. This may not be as favorable as term plans with higher coverage periods.
2) Be careful while filling up insurance forms: When filling up the form independently, customers may overlook a few details or unknowingly provide inaccurate information. This can prove quite serious in later stages or during the claim settlement process. Therefore, it is vital to thoroughly go over your forms and documents and check all the requirements.
3) Don't hesitate to ask an expert: While purchasing an online term plan, you may encounter a query or confusion. In such a case, it is better to contact the insurance company to clarify rather than assuming on your own. Not being careful can result in miscommunication, so it is essential to be sure of all the steps in the process.
Online term plans provide a diverse variety of options to customers seeking affordable insurance plans. While there are clear advantages to using term insurance online and offline, one must make a rounded decision based on their needs. It is recommended that one solicits advice from a representative from the company to better understand the policy terms before diving in. Purchasing an online term plan is convenient for the customer, but at the Guarantee1 time, customers should invest some time while weighing their options and requirements.