Why you should look to store insurance policies online
One of the major benefits is you can access them anywhere, any time.
Have you heard of the phrase — "looking for a needle in the haystack"? If yes, then you would know the plight of finding your key documents in the pile of papers stored everywhere at home! Papers are neither ever easy to store nor manage. And if you ever lose them, it's a nightmare to trace them back and even more difficult to get a duplicate document issued. However, with storage and acceptance of documents in electronic form gaining ground, you can now opt for convenience over hassle to manage your financial documents.
In the case of insurance, the regulator has recently asked all the insurers to issue policies in electronic form from October 2016 onwards. This has been done in order to make the process easier and consolidated. This whole new setup won't require extra effort or money; you can open your account online directly through the repository or contact your insurer to do the same. By doing so you can access your information at any time and you need not make a physical appearance. But even after having numerous advantages to its account, electronic platforms have some disadvantages as well. As of now, it isn't mandatory to store your policies in the e-format but the industry is far from ready. Since the process is still new in India, there are many advantages and disadvantages to both paper and electronic format. Going further let’s discuss the pros and cons online format has:
Pros of storing insurance policies online
Convenience: With the availability of all policy related documents at one online portal in the form of your account, it becomes easier to retrieve the information at the time of making claim, reviewing your policy or doing some modifications. You can access your account from anywhere in the world and review your policy documents at any time. Retrieval of data also becomes easier because you don't have to search everything manually. All this is available with the ease of sitting comfortable in your home without having to move.
Avert loss of document and provides safety: Since the documents are preserved in electronic form, the risk of losing any important information or document is almost next to impossible. Looming fear of damaging documents while keeping them in paper format can bring nightmares but with the introduction of the online format, this fear should no longer be a concern. The process of storing policies online is shared between the insurer, repository and the insured hence making other party intervention not possible. Another thing like duplication of documents can't be processed because it is very hard to duplicate e-policies. Hence you can stay tension free for the management of your documents and processing.
Saves paper: One of the important natural resources on the earth is wood out of which paper is made. Online format not only makes work hassle free but it also helps in saving paper. The work of keeping stacks of documents not only wastes a lot of money on the cost of printing but also on maintaining records in the form of paper. Therefore the choice of going online would not just save time but it might also make you an important part of saving earth’s resources drive.
Cost benefit: A digital platform cut short costing at various platforms. While for the policies bought online and offline the premium difference is high, the same time the cost spend on getting the policy documents printed cannot be neglected. If you have opened the account through the insurance company or the repository, you need not worry about the processing and all other activities, since the cost of maintaining policies online is really less. You get rid of costs associated with office supplies, paper, and printing. With a centralized location for storing data, the risk of duplication is also reduced which can also be considered as one of the factors which make online platform cost efficient.
Single platform: For storing, changing and modifying all your policies, you just have to operate through one single account. It's like multitasking from a single platform without fearing about making a mistake or losing some important quotation. From buying a policy to renewing it, or adding a new member to changing it, everything is now just one click away and to be done from the same platform. There is no need to visit the individual insurer’s offices, you can just put in your request at insurance repository service points and your queries will be resolved. Currently, there are four insurance repositories which you can look up to for your e-policy account are, NSDL database management limited, Central Insurance Repository Limited, CAMS Repository services limited etc.
Cons of storing insurance policies online
Confidentiality: People have been really worried about sharing their information through the online platform as the authorities or the persons are available for the procedure virtually. This makes the work more difficult as the high levels of accessibility and portability of electronic records are likely to increase the risk of unauthorized access or data theft. Although the people involved may be authorised officials but still, the problem like hacking prevails. What is required of the authorities is to adopt adequate security measures in order to guarantee information security.
Insurers have also raised concern over the functioning of repositories as on how they would safely store and protect customer data because there is a potential business leak hazard risk involved in the whole process. The data stored on the web is vulnerable to hacking and getting stolen, however distant a possibility that may be.
Connectivity issues: Suppose you are travelling to a remote location where internet access is hazy and you need access to your documents right away, in a situation like this hard copy comes handy. Even if you don’t have it on you, you can ask someone close to looking for it whereas sharing password of your account wouldn't be safe or convenient for your closed ones to access. Internet-based systems are hosted on the web, therefore, these systems will have connectivity issues from time to time because of the network. Hence, the debate of online vs paperwork is not fully finished.
Standardisation: The other question is raised on the standardization of the online platform i.e. questioning its efficiency, productivity, and quality. The procedure being still new will see many ups and downs in the future, therefore, it is hard to say that how efficiently it will work and at what quality. Currently, very few companies have their links with insurance repositories for the issuance of e-policies which also shows the lack of proper trust between the insurers and repositories. They are themselves waiting for the exposure to the procedure. The concerns might get eliminated in the coming timing but right now it is a matter of concern.
Although it is a brilliant step towards the digitizing India but it comes with its pros and cons. It might take some time in order to overcome those inhibitions but in any way, it is a much better way when compared to storing policies in the paper format. The transition towards electronic records is beneficial but there is a need to deploy proper strategies to implant effective and systematic structure of storing data online.The writer is Head of Life Insurance at Policybazaar.com