Are online term plans the right choice for everyone?

Deepak Yohannan
myinsuranceclub.com

Tech-savvy Indians now look online for everything, even insurance. The reasons are obvious—online purchase is convenient and quick, and it often features big discounts. So when the tech-savvy generation gets into gear to buy term plans, they eschew the agent and start shopping online.

The online medium has big advantages, but shopping for term plans online has its share of disadvantages too. In this article, therefore, let us consider the downsides to explain why online term plans do not work for everyone.

No agents here

The absence of agents is hailed as one of the highlights of online term plans. If there are no agents, it means that there are no agent’s commissions, which in turn results in cheaper premiums and greater savings for the term plan buyer.

Of course, there is a downside too. If there are no agents, it means that there is no one to guide you or show you other similar plans to suit your requirements. You do save money, but when it comes to making a choice, dealing with non-standard health problems, tackling policy issuance delays, claiming settlement later on, etc., you are on your own.

Not for the financially challenged

You may grudge the insurance agent his commission every time you buy or renew an insurance plan. But you have to give the devil his due. A good insurance agent does much more than sell you a plan—he also educates you about its pros and cons while offering similar options and insurance advice.

Thus, doing away with the agent may work for finance professionals with strong knowledge about term life insurance. But the layman may want to think again about his abilities in choosing the right term plan online.

Can You Look Beyond the Cost?

Many insurance buyers are so obsessed with low premiums that they forget everything else. While buying offline insurance, the agent will bring other crucial aspects to your notice. But when you go shopping online, you will have to examine everything—insurance cover, duration, insurer credibility, claim settlement record, exemptions, fine print, etc.—on your own.

Can you trust yourself to look beyond the premium costs when shopping for insurance?

Beware of Scams

Online scams are everywhere. Why should the insurance sector be spared? If you are shopping for term plans online, be safe. Deal with only credible insurers, names that sound familiar. If you are worried about transaction security, examine the URL—if it begins with “http” rather than “https”, do not carry on with the transaction.

Sometimes even credible insurers take their own sweet time to issue an acknowledgement. Know that the policy bond is supposed to arrive within 15 days from the date of issue of the policy. Since you bought the term plan online, there is no agent to take to task. You can only call customer care, or in the worst case, take legal action against the insurer.

So, Are Online Term Plans Right for You?

Before you go shopping for online term plans, think again. Online shopping is a good bet if you can manage without an agent, acquire a comprehensive understanding of the policy and its clauses, and ensure that you are not duped. If you cannot guarantee the above, stick with comparing policies online and then contact the trusty agent for the final purchase.

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