Purchase of life insurance can be done from an insurance agent (offline) or online. Although the latter form is becoming increasingly becoming popular, many people are still skeptical about how reliable and safe it really is.
If you are one among such people, these comparisons between buying insurance from an agent versus buying it online will help you decide which mode is best suited for you:
Online Insurance Purchase - Benefits
Ability to Draw Comparisons
If you buy life insurance from an aggregator, you can easily compare between the best of all policies. You cannot get this benefit when buying insurance from agents, they will insist you buy yourpolicy from their company.
Reaching Out to a Brand
When you buy insurance online, you are reaching out to a brand, a fully functional company who will be accessible to you 24/7. Agents on the other hand could be unreachable or may go back on their promises, whereas companies functioning online cannot afford to do so.
While purchasing insurance online, you can log on to the company’s website and directly go through the policy’s terms and conditions in full detail. You could even take screenshots or keep printouts. This significantly reduces the possibility of frauds. On the contrary, when purchasing insurance from an agent, it is quite likely that the agent manipulates the terms and conditions to try and influence your decision in his/her company’sfavour. Severalcustomers complain to insurance companiesabout their disappointment stemming from unusually high expectations that their agents’manipulated terms and conditions create.
Cost and Sum Assured
Most online life insurance plans work out to be almost 30-70% cheaper compared to their offline counterparts. This is primarily because no agents are involved, thereby eliminating agent commissions/intermediary costs.
Also, in online insurance purchase, the average usually sum assured tends to be higher, because of thelower costs overall and zero mortality risks.
Claim Settlement Ratio
When you purchase online term insurance, you first see the claim settlement ratio page. This helps you understand which company to buy the policy from. On the other hand, in case of offline insurance purchase, one has to depend on the agent to furnish true information about the company’s claim settlement ratio. Most often, agents will try to hard sell the company they work for, irrespective of how good or bad the claim settlement ratio of that company is.
Flexibility, No Room for Errors
The online insurance purchase mode offers higher flexibility and a wider range of options to help you choose your life insurance plan. However, since an agent is not there to guide you, you need to do your own research while buying a policy online. This could be a blessing in disguise as in the offline mode, you may blindly trust the agent and leave it to him to the fill the form on your behalf. There have been instances when agents have misplaced customers' information while filling forms or made mistakes in the forms, either intentionally or erroneously. Such mistakes could turn out to be very costly during claim settlement.
Offline Insurance Purchase - Benefits
The higher sum assured in online insurance policies can sometimes be an eyewash and just a marketing tactic of insurance companies. It is common to see a company claiming that you can get an INR 1 crore life insurance plan for just INR 500 a month. Usually, customers are tempted to purchase such a high cover even if they do not really require it. This is where an offline insurance policy purchase could be a more reasonable choice.
Online term plans only offer death benefit, and accidental death coverage is offered at an additional premium. However, online plans usually do not offer riders like critical illness coverage, accidental death benefit, Permanent Disability Benefit, etc.
How to Decide
If you do not feel confident enough to opt for online insurance purchase, start by checking details about the policy online. Most insurance companies have toll-free numbers that you can call on to clarify your doubts and queries. After getting your clarifications from all the available sources, you would have a clearer picture, which in turn will put you in a better position to take a more informed decision.
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Convenience in the overall buying process, quick access, lower premiums due to lesser operational costs, less paperwork, higher transparency, ease in payment and renewal – for all these reasons, the online mode of insurance purchase wins over the offline mode of buying through an agent.
However, irrespective of the chosen mode, it is advisable that you work out the correct insurance amount you require before going ahead and purchasing a policy. Also ensure that you honestly declare all details about your personal and family health history – even if this means you need to pay a slightly higher premium, it is worth it.