A Quick Guide to Buying Life Insurance Online
Life Insurance Policy is an agreement and a promise between two parties - the insurer and the insured. An individual pays a premium to secure his life and finances against his death, illness, or disability, providing financial stability to his loved ones if he is not around.
By accepting the premium, the insurer gets into the agreement and covers the insured against financial losses that may occur out of his death or any serious contingency.
What is Online Life Insurance Policy?
This is a smart way of buying a Life cover with added advantages of a higher sum assured along with a lower premium to be paid. There are many benefits of buying an online insurance policy taking into consideration the umpteen hassles one may go through by physically contacting agents and brokers, paying extra for the policy, and not getting complete information of the product they are interested in buying.
With Tax benefits under section 80 C, 80D, and Section 10 of the Indian Income Tax Act 1961, an online policy offers transparency, flexibility, and accessibility to a myriad of companies and options, making the individual the boss to compare every policy and eventually settle for the best.
Process of buying an online life insurance
The most convenient and cost-effective way of buying a life cover is to purchase it online, which offers benefits of comparison among policies, analysis, and decision making. The simple process needs to be followed for the same:
- Application form to be duly filled in
- Relevant and correct details to be furnished
- Pay the premium online
- Issuance of policy – soft copy is immediately mailed or messaged to the customer.
- Documents required to purchase the policy
||Date of Birth Proof
||KYC documents like a declaration form
|ITR for 3 years
|Salary slips of three or six months
||Passbook of 6 months
||Matriculation of mark sheet of class X
||Terms and conditions
|CA certificate for self-employed individuals
||Saving account bank statement
|Ration card with photograph
||marriage women’s property act document
|Affidavit certified by a gazetted officer.
Features and Benefits of an Online Life Insurance Policy
India is a tech-savvy country, and with the immense growth in the e-commerce field, many prefer to invest in a life insurance policy after doing thorough scrutiny of available policies online using technology and settling for the best as per their individual needs.
- Purchasing benefits with a low premium and high sum assured
- An informed deal about the relevance, features, offers, and benefits of insurance policies
- Reviews and ratings of the insurance company help decide the credibility and goodwill of each of them
- Automated services like purchase, renewal and claim process make online buying of policies very popular
- Promptness, accessibility, and swiftness
- Comparison of policies wherein important features can be compared against the other policies and the best one as per individual needs can be bought
- Saves time, effort, and money
- Security of Policy documents as it is instantly shared with the customer and a soft copy is maintained unlike the fear of losing a hard copy or a physical insurance policy document
- No intermediary or no agent involved so no hidden information, facts about each policy are revealed, and the cost incurred for the agent is eliminated
- 24*7 customer service support
Difference between Online and Offline Policy
||Reduced cost - offering lower premium and higher sum assured
||More expensive due to the agent’s cost merged in the policy cost.
||Religious comparison between various policies of innumerable insurance companies can be made
||The agent will explain only the details of the company he is employed with and will not give out any other insurance company information.
||100% transparency as all details availed in the features segment
||Disadvantages, cons, and other issues regarding the policy are not revealed many times. Complete honesty cannot be expected.
|Informed Insurance Decision
|Ease of access
||It can be done anytime, anywhere and within the comforts of one’s space
||Formal meeting needs to be conducted
||e-transactions could invite fraudulence
||Higher risk of fraud
||Changes can be made as per the choice of the customer
||Once bought, it cannot be changed.
||Original reviews, rankings, and ratings can be checked and confirmed
|Claim Settlement Ratio and Incurred Claims Ration
||CSR and ICR can be compared amongst various insurance companies as everything is available online. These are also the two main categories to look for when buying an insurance policy
||Only about the concerned company
|No room for errors in form filling
||There can be errors
||Professional expertise, errors can be avoided.
|Accuracy of information
Things to avoid while purchasing an online Life Insurance Policy
Here is a rundown to the things that you should avoid when buying a life insurance policy online:
- Customer should not get unduly attracted to the luring abilities and covers, which could be huge and unnecessary for him
- Poor research and unfavourable findings on the internet, which has a vast database, can be detrimental for the customer who is investing his money on it
- Poor form filling can lead to claim issues or other policy related hurdles that should be avoided
- Inaccurate information like wrong address, wrong date of birth can also term the policy null and void in a few cases. It could also be tiresome to make relevant changes to correct the information as stringent documentation is required to change the policy's essential details
- The customer continually ignores the long tenure of buying the policy, and the insurance companies play on this by giving them other attractive offers. This is an essential feature that must be checked by the individual
Drawbacks of online life insurance
Although it’s a win-win situation, it comes with a few roadblocks and hurdles. Some of the drawbacks of buying online life insurance are as follows:
- Pre-set life insurance plans are available on the internet. It is easy to buy a policy with fixed features, but it becomes difficult to customize these plans
- Buying additional riders like accidental, critical illness, and disability riders may get complicated and expensive. There are not too many options available on the internet
- Guidance and professional expertise of an agent are missing who can answer questions and help people who are entirely new in buying insurance
- Form filling errors can be avoided with the help of an agent’s guidance, whereas there is a higher scope of making mistakes while filling an online form
- Online claim procedure, if not prompt, could be troublesome, which also requires a lot of follow-ups. The policyholder may not find the time or make the effort of resolving claim related issues
- Another drawback of looking up for life insurance policies online is if the portals are updated and upgraded as per the Latest Changes in case of old information displayed on the insurer's portal
- E-transactions could be risky if there is a network connectivity issue. There also exists the danger of e-fraud, where someone can hack vital information regarding a person’s financials
Ans: There is a facility to buy and compare all kinds of policies online, make scrutinized comparison, and buy the best one that suits individual demands and needs.
Ans: The customer should compare the following details which searching for life insurance policies online:
- Sum assured
- Premium to paid
- Policy Terms
- Riders that can be bought additionally
- Tax benefits
- Incurred Claims Ratio
- Claims Return Ratio
- Reliability and credibility of the Insurance company
- Ranking, Rating, and Review of the insurance company
Ans: There is no specified age to buy a life insourcing policy. Still, it is strongly recommended to buy it as early as possible to get the maximum benefit of a higher sum assured and a lower premium. Other benefits are also included in the policy when bought in the early years of life.
Ans: Yes, IRDA has allowed a 15 - day free look period for most policies. If the individual changes his mind, he can cancel the policy online, and a refund will be made within a specified time through the same mode, it was paid in the first place.
Ans: Many other changes/modifications, claims, renewals, and other functions regarding the policy can be processed online.