Should I Go for Online Term Insurance – Is There a Catch?
The online insurance market is relatively new, and the growing online frauds have raised the scepticism of the customers. It is normal to think about the genuineness of a product while purchasing it. In offline mode, you have an agent who guides you throughout the process. However, when it comes to online mode, you have to do the process yourself. This article answers your question – ‘Is it possible to buy an online term insurance policy?’.
Is it Possible to Buy a Term Insurance Policy Online?
It is very easy to buy an online term insurance policy. You can visit the online website of the insurer and get all the information you need. You can log in and apply for your term insurance. But, what should you check before applying for an online term insurance policy? Given below are the points on the same.
- Best Term Plan for You
You should use an online term plan calculator to know your eligibility for an online term insurance policy. You are required to fill in your income details, date of birth, smoking habits, tenure of the term insurance policy, etc. Once you fill in these details, the website displays the best term plans along with the term insurance premium for you.
- Term Insurance Premium
You have to pay the term insurance premium regularly for the tenure of the policy. Hence, you should compare the premiums for different insurers and the benefits they provide. In this way, you can choose the best term insurance premium that suits your budget and provides you with the best term plan.
Is There a Catch? Misconceptions Regarding Online Term Insurance
Are online term insurance policies genuine? Or is there a catch? Most people are new to the online market. So, they find it hard to believe online insurers. Customers have common misconceptions about online term insurance. Let’s see them in detail.
- Charging Low Term Insurance Premium Can Be Fraudulent
Online term insurance looks fraudulent because of the lower premium rates charged by the insurers. The reason for a cheaper premium is savings in distribution cost and agent’s commission. This benefit is passed on to the customers. Hence, an online term insurance policy charges less premium.
- Insurers Do Not Honour Online Claims
There is no difference between claim settlement rules in offline and online insurance policies. Customers try to conceal important information that can increase their insurance premium rates in online applications. Most claims are rejected due to this. Here are the instances where an insurer can reject your claim:
- When death is due to suicide
- When death is due to drug overdose or non-prescription medication
- When the nominee murders the policyholder
- If the policyholder doesn’t disclose a pre-existing medical condition
- If the policyholder indulges in hazardous activities that can cause death or critical injury without disclosing it
- If death is due to heavy intoxication or drunken driving
- If death is caused by a natural calamity
- Hard to Believe New Insurance Companies
An insurance company has to maintain a solvency ratio of 1.5 times its current liabilities. So, you can trust any insurance company registered with IRDAI. They have to disclose their solvency ratio to the IRDAI from time to time.
- The Difference in Term Insurance Products
Although term insurance policies are similar, some insurance companies try to innovate their product to provide better options to the customers. Some insurers make deferred payments for the sum assured to the beneficiary.
Some may pay a lump sum claim amount and defer the remaining payment over some years. Some policies make deferred payments that increase every year to counter inflation. These are basic differences that you see in the term insurance products.
- The Claim Settlement Process is Different for Online Policies
The claim settlement process is the same for offline and online policies. Claims made during the first two years have to be settled within six months from the claim date. Claims made after two years have to be settled within 90 days.
The insurance companies prefer online term insurance policies because they get educated customers who have sufficient income to maintain internet services. It is safe to purchase an insurance policy online.
You should check the term insurance premium using an online term plan calculator. You can compare the calculated premium online to identify the best term insurance policy for you.