Life insurance plays a pivotal role in safeguarding your family’s financial well-being in case of an unexpected absence. Term insurance plans provide pure protection at low premium costs for policy tenures between 10 to 30 years. When purchasing term insurance for the first time, one
key decision is whether to buy online or take the offline agent route.
In this comprehensive guide, we dive deep into the merits and limitations of online term plans versus offline purchases to enable prudent selection as per individual situations and preferences.
What is Term Life Insurance?
Before comparing online/offline channels, it is important to understand what life insurance fundamentally offers. It is a life cover policy where:
The policyholder pays regular premiums towards securing a defined sum insured
This sum insured is paid out to their nominee(s) in case of their unfortunate demise during the policy term
The premium paid is not returned to the policyholder if they survive the policy tenure
Why Buying Term Insurance is Necessary
Here are some scenarios where term insurance proceeds make a real difference:
1.The premature death of the sole working member– Creates instant funds to repay existing loans, so dependents have one less financial worry.
2.Loss of main income source – Term insurance proceeds help families maintain the same quality of life in the grieving period
3.Financial independence for homemakers – Payout gives more flexibility to choose how they wish to generate replacement income
4.Support children’s ongoing education and weddings.
When to Buy Term Insurance
Ideal term plan purchase time is early in adult life when premiums are minimal. Trigger points for existing income earners include:
Taking housing loans
Wedding/children
Job switch with salary hike
Additional income source
The cover should adequately reflect the family’s current and future financial obligations identified through prudent calculation approaches.
Where Can I Buy Term Plans From?
Earlier term insurance plans were only available offline through insurance agents. But now, technology has enabled online insurance purchases directly from insurer websites or digital marketplaces.
Purchasing Term Insurance Online
Buying term insurance online means purchasing policies on the internet directly without offline insurance agent assistance. This can be done via:
Individual insurance provider websites
Insurance aggregators/marketplaces
Such online channels offer policies across dozens of insurers, product comparisons and pricing discounts not viable offline.
Key Benefits of Online Term Plans
Choosing to buy term insurance online has several advantages:
1. Significant Cost Savings
Online term plans have lower distribution costs since no agent commissions need to be paid. This means substantial premium discounts to you.
2. Wider Product Range
You can compare term insurance policies across over 20 reputed life insurers using a single online platform. This enables identifying the optimal product fit basis factors like claim settlement record, riders offered and post-purchase servicing quality.
3. Round-the-Clock Accessibility
Digital platforms allow applying for term insurance on a 24×7 basis at your convenience without restrictive working hours. You are not dependent on agent availability. The entire purchasing journey, from comparing products and reading policy literature to completing applications and premium payments, can be done via a self-service model without ever needing to step out.
4. Minimal Documentation
Online application platforms are digitally integrated with authentication partners like Aadhar, PAN Card, CKYC, etc. This enables seamless data flows for KYC and reduces document overhead drastically compared to offline purchases.
5. Convenience
You do not need to reserve slots, wait for representatives or keep physical appointments. The term insurance buying journey can be completed in under 10 minutes at your pace and comfort without logistics hassles.
Buying Term Insurance Offline
Offline term insurance purchases take place face-to-face with insurance agents acting as facilitators of policy selection.
Here are some types of insurance agents:
Individual Agents: Self-employed professionals who sell policies across few insurers
Corporate Agents: Bank branches, NBFCs, etc., act as touchpoints for specific insurers
Broker Agents: Licensed entities that sell insurance across varied products and numerous provider tie-ups
Key Benefits of Offline Term Plan Purchase
Opting for the offline route offers notable upsides:
1. Personal Rapport Building with Agents
Agents suggest plans not just based on price but holistic familial protection needs across health, life, and retirement buckets. You build closer proximity and trust much beyond a transactional purchase experience.
2. Expert Hand-holding on Suitable Products
Reputed agents thoroughly explain term insurance product constructs, policy coverage nuances, and inclusions/exclusions basis your exact needs. This advice helps overcome the often steep orientation curve for novices to select appropriate covers.
3. Assistance with Service Requests
Agents help liaison suitable responses from insurers on claims assistance, document help, etc., acting as prompt problem resolvers even for the most complex queries.
4. Proactive Renewal Reminders
In addition to manual renewal notices from insurers, agents often make extra efforts to advise customers on renewals to ensure continuity of covers and help upgrade policies if the life stage needs to be. This helps combat policy lapses.
Which is Better for Term Plan Buys – Online or Offline?
Now that we have weighed key pros and cons, deciding between online term insurance policies versus offline depends on individual aspects. For tech-savvy and digitally channel-comfortable consumers who value cost, online plans work brilliantly. If you have financial fluency around term plans and can self-educate on products, go online to maximise value. However, online plans pose renewability risks and service gaps that offline channels mitigate through agents and ensure a trust safety net.
