As per IRDA Annual Report, 2010-11 the total premium underwritten by the life insurance sector in 2010-11 was Rs 2,91,605 crore as against Rs 2,65,447 crore in 2009-10 exhibiting a growth of 9.85%.
The online insurance segment has been a significant contributor to this growth with 10 private insurers and India’s largest public sector insurer, LIC announcing the intent to enter this space as well.
Online insurance has found a market among the urban upwardly mobile customers due to the “do-it-yourself” nature of insurance purchase that has made the process far simpler and cost effective. With most of the major insurers in India launching online insurance products, customers need to make some smart decisions about the policy they select and the need to invest in online insurance.
It is in this context that I would like to highlight a few things that one should keep in mind while buying or selecting an online term insurance plan:
Insurance cover: How much insurance cover do you actually need? Ask this question to yourself and also analyze your family’s future financial needs and your current lifestyle. It is very important to carefully select a plan that will meet any future liabilities incase something were to happen to you.
One should consider factors such as debt repayments, existing insurance cover, and current annual income before deciding the amount of insurance required.
Selecting the right term: Its always advisable to take a longer term than a shorter term when you are young. For example a young and healthy professional of 30 years should opt for a 35-40 years term rather than a 15-20 years term. This will ensure that you do not need to buy another plan in the later years where you may need to shell out more premium.
Claim settlement ratio: Check out for the claim settlement ratio of the company of which you plan to invest in. Generally a claim settlement ratio of 80% and above can be termed as a good one.
Reveal all relevant data: It’s important for a person to be honest when filling in the proposal form. Misrepresentation or hiding important facts linked to health, income, etc may impact the claim settlement.
Premiums: There are many comparator sites available so you can check across companies and premiums before deciding on your policy.
Security: While applying for online insurance, take care that all your data is secure and you do not leave any personal details lying around on somebody else’s machine. While all insurance companies guarantee protection of data, they are not responsible for any misuse that might happen due to your negligence. Do not fill in online policy documents from a cyber café or someone else’s computer. Log out after you complete filling your details.
This article has been written by Gaurav Rajput, Director Marketing of Aviva India.