Many Tech-savvy people buy groceries, white goods, gadgets and many more through e-commerce platforms. However, when it comes to buying insurance, some still prefer face-to-face interaction with agents.
Insurers provide online platforms for buying insurance policies directly from them. It gives a lot of benefits to its buyers.
An insurer incurs various costs in the form of distribution, agent’s commission and paperwork when you buy from an insurance agent. However, on buying directly they save on these costs, which are passed on to its customers in the form of lower premiums. Online premiums are about 5-40 per cent cheaper than regular premiums.
Getting a 20 percent off (Rs 3,000) on your annual premium of Rs 15,000 can give an Rs 8 lakh booster to your financial wealth at the end of 30 years when such savings are invested in equities.
Mortality risk of online customers is also perceived to be lower, which in turn reduces their premium. Online customers are usually well aware, educated and transparent with unknown or hidden mortality risk being almost negligible, according to an insurer website.
Sometimes, the insurer also offers a higher sum assured for its online customers.
2. Fair comparison
When you buy directly, you get access to first-hand information about policies from the company’s website. Terms and conditions, inclusions as well as exclusions are known upfront with little scope for ambiguity. If there are still doubts, you can call up their call centre for clarifications or check customer reviews on social media.
Unscrupulous agents, in turn, might mis-sell you a policy in order to earn commissions and hide certain clauses or resort to false promises in order to win you over. Suppression or lie of any sort can lead to rejection of claims by the insurer. By filling all information yourself including that of medical history, you ensure there is no scope for mistakes or frauds from the broker’s end.
3. Quicker claims
As per the regulatory norms, all claims should usually be settled within a period of 90 days. And if you are an online customer, some insurers are promising a quicker claim - say in 24 hours of submitting the required documents. A nominal interest for each day of delay is also being assured on the death claim amount. However, you need to go through its fine print.
Agents often wax eloquent about doing the running around in times of need by helping you with the claim process. However, with better redressal mechanism in place and regulatory oversight, claims are already a simple and quick process.
Buying insurance directly online is also super convenient.
Term insurance is the best option those for seeking pure risk cover. It is relatively easier to buy. Shortlist about five insurers on the basis of their record of claim settlements and market reputation. Later, get online premium quotes from their respective websites or web aggregators. Look for distinct exclusions in their policy documents and buy the one that provides the best value.
Once you made the choice, you keep paying premiums online every year. There are no deadlines to be missed due to delayed submissions of papers or collection of cheque by the agent.
The flip side
Many people prefer offline modes due to lack of knowledge about the subject. Moreover, there might be various questions in mind after reading policy details. It might be impersonal and annoying to go through automated systems and be put on hold. Some others simply don’t have the time to do the research.
In such cases, it is advisable to approach a fee-only Sebi-registered investment advisor instead of a fee-based insurance agent/broker who will only sell his wares. The former earns money only through fees that clients pay, while fee-based advisors make money from both client fees as well as commission from insurers, which poses a potential conflict of interest.
The recommended policy should be later bought online by the individual.
Buying term policies directly from an insurer and from its website saves on premium costs and is convenient. In the process, you also understand policies comprehensively and shortlist the one that really suits your needs.