Don’t Be Wary Of Online Insurance Plans

Can you die tomorrow and not worry about whether your dependents will have enough money to continue with the same lifestyle? This is an important question that everyone needs to answer. You can have peace of mind if your term insurance cover is large enough to give your family a corpus to generate an income enough to take care of basic expenses, meet major financial goals such as children’s weddings, and settle other liabilities like home and car loans.

Key Points
The low cost of the cover and the ease of buying has made online term plans very popular.
Those buying health insurance policies at the last minute (before March 31) for tax reasons can instantly get the digital copy of the policy in their mailbox even on the evening of March 31.
If you are not comfortable purchasing an insurance product without human intervention, the online medium allows you to research the possibilities and compare the options before you buy the insurance policy you are seeking.

Remember that the term of your policy is also very important. An insurance policy should cover a person at least till the age of 60-65 years. Do not take a short-term policy of 15-20 years that will terminate when you are in your 40s, as the insurance needs of an individual peak at that age. Moreover, buying a new term policy in your 40s will be very expensive and you might even be denied cover if you are not in good health.

The positive news is that covering your life has never been as affordable as it is now. The entry of low-cost online term plans means that a 30-year old individual can buy a cover of Rs 1 crore for as little as Rs 25 a day. It takes only 45 minutes to fill up the online form and you are done. Of course, you will have to submit documents and, in most cases, there will be a thorough medical check-up before the policy is issued.

The low cost of the cover and the ease of buying has made online term plans very popular. A big benefit of buying policies online is that consumers can see the best rates on offer, as the internet is a transparent mechanism and companies need to offer the best rates to ensure the consumer does not go away. Moroever, you can buy at any time during the day. This feature has been put to good use by those buying health insurance policies at the last minute (before March 31) for tax reasons, as it is possible to instantly get the digital copy of the policy in your mailbox even on the evening of March 31. Also, most of these sites offer a 24x7 chat facility to enable you to clarify doubts regarding the policy and its clauses.

Despite the popularity of online insurance plans, insurance buyers continue to look at online term plans with an air of doubt, which is mostly fuelled by the low premium charged by these plans. Moreover, the agent lobby has made all attempts to scare insurance buyers off online term plans as they see these as a big threat to their livelihood. In fact, this lobby is so powerful that LIC, which had planned to launch an online term plan in August 2011, had to shelve the idea because of the stiff opposition it was met with.

Term plans are very straightforward products, and it is very difficult to make a mistake while buying one. Even so, here are a few pointers to keep in mind when you buy an online plan. To avoid losing sleep, choose a company that has a good reputation and is not likely to default if your claim is genuine.

Of course, this is not to say that nothing can go amiss while buying an online plan. First, there are minor irritants such as factors like the online buy pages do not work on browsers other than Internet Explorer. Also, some benefits that are available in the offline world are not available in the online option due to fraud control requirements. The offers in the online life insurance market too are relatively fewer as compared to those in the non-life market, but these are increasing at a fast pace. For example, companies like AEGON Religare have come up with online policies not available through the company’s agents, and payment for these has to be made through the company’s website only.

Also, one must remember that securing a claim from the insurance company does not depend only on the settlement ratio of the company. What is more important when it comes to securing a claim is the timeliness and correctness with which you fill the claim form.

Even if you are not comfortable purchasing an insurance product without human intervention, the possibilities of doing proper research and comparison before you buy the insurance policy you are seeking should make it obligatory for you to use the online medium.

Also bear in mind that buying insurance is not a once in a lifetime affair. Review your cover every time there is a change in your life situation. You may need to add more insurance if you have a child or if you take a home loan. Besides, you need to factor in inflation too. A cover of Rs 40 lakh may seem enough today, but will not be sufficient 10 years down the line.