Term insurance is a life cover that offers the advantage of a higher sum assured for a comparatively lower premium as compared to other kinds of life insurance plans. It is an essential kind of insurance for your financial portfolio, as it gives you peace of mind knowing that your loved ones will be financially secured when you are not around. Plus it is simple and affordable.
Dheeraj Sehgal, Chief Distribution Officer – Institutional, Bajaj Allianz Life Insurance believes that online term plans make it easy for you to adopt the ROPO (Research Online Purchase Offline) strategy. Using online and digital tools, you can perform a thorough research on the plans available on your own. Thereafter, once you’ve made your choice, you can either continue with the online mode or make your purchase through the web, or you could buy the term plan of your choice offline.
Distribution trends
The size of India’s online insurance market was approximately ₹ 15 billion (as of 2019), as per a JM Financial report. By 2025, it is expected to reach around ₹ 37 billion.
Dheeraj Sehgal, Chief Distribution Officer – Institutional, Bajaj Allianz Life Insurance writes that a major factor driving this change is the increasing number of consumers who are adopting digital solutions. As per a report by ICEA, India’s smartphone user base, currently at around 500 million, is projected to climb to 830 million by 2022. And many insurers are keeping pace with this change by offering insurance solutions online. Web aggregators are another source of online term plans in addition to the websites of insurance companies.
The benefits of buying online term plans
If you choose to buy a term insurance plan online, there are several ways in which you can benefit. Here’s looking at the primary advantages of buying a term plan online.
Better pricing
Think about your favorite pair of sneakers at a retail store. It may appear quite expensive at the store, but when you get back home and look up the same set of sneakers online, you’ll likely to find a 10-15% dip in the pricing. That’s because the company passes on the cost advantage of a direct sale to the consumer. Much like this, one of the most prominent benefits of an online term plan is the lower rate of premium in comparison to the offline plan that it’s tied to.
Make informed decisions
With instant access to a wealth of information online, customers today are researching every purchase they make, be it a smartphone or a toothpaste. They rely on online reviews, feedback from friends, and company websites. Because of this, each decision is an informed one. Similarly, when you buy a term plan online, you have access to a great deal of online literature and resources that help you understand the features of each plan better, view its benefit illustration, and more with just a few clicks. That’s not all. With online tools and calculators that facilitate easy comparison of policies, you can instantly weigh your options and find the right term policy for your requirements. For instance, online calculators can give you a picture of how much insurance cover you should opt for based on the needs and goals of your dependents, as well as on your loan, liabilities and other factors. Then there are online premium calculators that help you compare rates of different term insurance plans, along with their benefits.
Innovative and value-add products
With the rise in demand for online term plans, there has also been an increase in the scope for innovative solutions. Insurers now offer a wider gamut of new-age term plans that go beyond just a plain vanilla cover, to include comprehensive benefits and additional covers. For instance, some term plans today offer child education cover, health protection cover through a critical illness rider, to ensure there are no roadblocks that derail customers’ life goals. Further many insurers today also incentivise policyholders for maintaining a healthy lifestyle, e.g. lower premiums for non-smokers.
Another area where term plans have evolved is that one can opt for plans where the cover increases with changes in life stages like marriage, birth of child etc. This is to factor in the changes of an individual’s financial obligations and responsibilities with time.
Things to remember while buying term plans online
Before you go ahead and buy a term plan online, there are certain essential things you need to keep in mind. These points are discussed here.
Ensure that you have all documents compiled and ready to be submitted as soft copies. If your paperwork is in place, it helps getting your insurance application processed sooner.
If your insurer requires that you need to go through some formalities such as medical tests, you need to comply with these requirements. This irons out any potential roadblocks standing in the way of your insurance application being approved.
It’s important to declare all details correctly when you apply for your insurance plan. Also, do keep your insurer updated about any changes in your contact information like your address or phone number.
At the time of purchase, you can opt for auto-debit facility for paying premiums, so you need not stress about paying the renewal premiums on time.
In Conclusion
Knowing the benefits and things to remember before buying a term plan will help you make wise investment decisions. Go for a term plan today as it is the basic ‘must have’ life insurance cover in today’s uncertain environment. It acts like a safety shield for your family’s goals even if you are not around to fulfil them. BY Dheeraj Sehgal, Chief Distribution Officer – Institutional, Bajaj Allianz Life Insurance.
