Are Online Term Insurance Plans Inexpensive?

India is witnessing proliferating internet usage and people are getting increasingly comfortable with transacting ‘virtually’. This, coupled with technological progressions, has made online purchase of services such as insurance quicker, simpler, and immensely popular, compared to the offline mode of insurance purchase. Most insurance companies have begun offering insurance products on their websites.

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Online has become a one-stop destination to shop for different insurance products at different prices, giving people a better opportunity to scrutinise, compare and thereby make better purchase decisions.

It is seen that people are particularly inclined to online term plan, because term plans specifically turn out to be cheaper than their offline equivalents.

But what makes an online term insurance plan more economical compared to its offline counterpart? Is there a hidden catch? Let’s find out.

Note: Know more about what is term insurance first before reading this article.

Term Plans

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₹50
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Life Cover

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₹75
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Life Cover

@ Starting from ₹ 12/day⁺

Simplicity

Contributing to lower costs of online term insurance plans is the fact that these plans are fundamentally simple, offering just death benefits. Therefore, term insurance plans are easy even for a layperson to understand and he/she can easily buy it online without confusion.

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No Administration Expenses

Selling insurance offline is expensive. Apart from numerous administrative expenses, it involves plenty of paperwork, marketing and selling costs – all of which constitute a part of the final policy cost. These expenses also spill over to the premiums that customers have to pay.

Contrarily, selling term insurance online does not involve these outlays. Customers just need to go online, choose a plan in tune with their specific needs and conduct all associated transactions on the web. Since a major part of the transaction is online and paperless, the policy processing cost saving is passed on to customers. Website creation is a one-time expense, and website maintenance and updates involve minimal spending.

In a nutshell, online insurance dealings translate to a high-return low-expense channel for insurers and offer hassle-free transacting for customers.

You may like to read: 10 mistakes to avoid while buying a term policy.

Commissions Eliminated

The commissions insurance companies pay to brokers or agents hired to market their insurance products form a sizable chunk of the premium charged to customers. This is a key reason why offline term insurance plans cost more, involving higher premiums.

However, no commissions are involved in online term insurance sales - this lowers distribution costs, premiums, and overall pricing. The resultant cost reduction works to the customers’ advantage, since insurers pass on the economic benefits to them, making ‘lower pricing’ the USP of the term plan sold online.

Note: You can easily calculate the term plan premium by using the term insurance premium calculator online tool.

Better Customers, Lower Risk

Transacting online for insurance means profiling potential customers based on their comfort level and frequency of internet use. Insurance companies assume that customers purchasing insurance online are usually better educated and informed, more careful about their health, and have access to better health-care amenities, compared to people who are not big on internet use. Online customers therefore pose a lower risk for insurance providers.

Insurers are also able to get more detailed customer information through the online sales mode. Too much information about customers is not available to insurers when selling insurance offline, as they have to battle time constraints, deal with agents/brokers, and manage things like incomplete forms (due to agent-buyer trust).

Perception About Online Insurance Buyers

As mentioned above, insurance companies have a better overall perception about online customers. This positive perception translates to better morbidity and mortality assumptions, leading to further price reductions.

The claims Repudiation Myth

It is often assumed that the lower cost of an online term insurance plan is because of claim repudiation by the concerned insurance company. This is a myth. The truth is that disclosure levels on online proposal forms are very high, making all the information complete and transparent, leaving no room for claim repudiation.

Note: Every company has its own underwriting rules and claim records. This, along with how aggressive the insurers’ marketing strategies are, lead to varying online term plan premiums offered by different insurers.

The Future is Online

The above factors explain why online term plans are cheaper than offline plans. There is no other caveat, catch or downside in buying a term insurance plan online.

An increasing number of people are opting for online term insurance policies since they are less expensive, while fulfilling the core objective of providing adequate life cover at affordable prices. Online term insurance plans now constitute a major part of the insurance market - they are truly the future of insurance.

Note: You should also check the term insurance benefits if you are planning to purchase the term insurance plan.

Note: Check out the best term insurance plan in India and choose one that suits your requirements.

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˜The insurers/plans mentioned are arranged in order of highest to lowest Sum Assured(SA) offered by Policybazaar’s insurer partners offering term insurance plans on our platform, as per ‘first year premium of life insurers as at 31.03.2025 report’ published by IRDAI.

Policybazaar does not endorse, rate or recommend any particular insurer or insurance product offered by any insurer. For complete list of insurers in India refer to the IRDAI website www.irdai.gov.in

Rs. 400/month is starting price for a 1 crore term life insurance for an 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 30 years of age, rounded off to nearest 10.

Rs. 400/month (Rs.13/day) is starting price for a 1 crore term life insurance for an 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 30 years of age.

+Rs. 230 is starting price for a 50 lakhs term life insurance for an 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 30 years of age, rounded off to nearest 10.

+Rs. 8/day is starting price for a 50 lakhs term life insurance for an 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 30 years of age, rounded off to nearest 10.

+Rs. 12/day is starting price for a 75 lakhs term life insurance for an 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 30 years of age, rounded off to nearest 10.

+Rs. 497/month is starting price for a 1.5 crore term life insurance for an 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 30 years of age.

+Rs. 487/month is starting price for a 2 crore term life insurance for an 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 30 years of age.

+Rs. 626/month is starting price for a 3 crore term life insurance for an 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 30 years of age.

+Rs. 905/month is starting price for a 5 crore term life insurance for an 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 30 years of age.

+Rs. 1,267/month is starting price for a 7 crore term life insurance for an 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 30 years of age.

*The full refund of premium is available on availing the one-time option of refund of premium. Total premium paid for policy (paid for add-ons) will be the special exit value, payable on availing the one-time option of refund of premium if you wish to completely exit the policy.

+Rs. 447/month is starting price for a 1 crore term life insurance for an (NRI) 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 30 years of age.

+Rs.679/month is starting price for a 2 crore term life insurance for an (NRI) 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 30 years of age.

+Rs. 910/month is starting price for a 3 crore term life insurance for an (NRI) 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 30 years of age.

+Rs. 1,374/month is starting price for a 5 crore term life insurance for an (NRI) 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 30 years of age.

+Rs. 1,924month is starting price for a 7 crore term life insurance for an (NRI) 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 30 years of age.

Women

+Rs. 400/month is Starting price for a 1 crore term life insurance for an 18 year-old Female, non-smoker, with no pre-existing diseases, cover upto 30 years of age, rounded off to nearest 10.

Rs. 461/month is the starting price for a 1 crore term life insurance for an 24 year-old female, non-smoker, with no pre-existing diseases, cover upto 54 years of age.

1,642/month is the starting price for a 1 crore term life insurance for an 44 year-old female, non-smoker, with no pre-existing diseases, cover upto 74 years of age.

Prices offered by the insurer are as per the approved insurance plans | #All savings and online discounts are provided by insurers as per IRDAI approved insurance plans | Standard Terms and Conditions Apply | **Tax Benefits are subject to changes in tax laws.| Policybazaar Insurance Brokers Private Limited

We will respond in the first instance within 30 minutes of the customers contacting us. 30-minute claim support service is for the purpose of giving reasonable assistance to the policyholder in pursuance of the claim. Settlement of claim (including cashless claim) is the responsibility of the insurer as per policy terms and conditions. The 30-minute claim support is subject to our operations not being impacted by a system failure or force majeure event or for reasons beyond our control. For further details, 24x7 Claims Support Helpline can be reached out at 1800-258-5881

For more details on risk factors, terms and conditions, please read the sales brochure carefully before concluding a sale

Policybazaar Insurance Brokers Private Limited | CIN: U74999HR2014PTC053454 | Registered Office - Plot No.119, Sector - 44, Gurgaon, Haryana – 122001 | Registration No. 742, Valid till 09/06/2027, License category- Composite Broker Visitors are hereby informed that their information submitted on the website may be shared with insurers. Product information is authentic and solely based on the information received from the insurers.

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