Online Insurance
Our world and everything it encompasses is evolving fast. The insurance market in India is no exception to this and the insurers now offer online insurance to the policy buyers to keep up with today’s digitally driven demands.
As for the customers, the availability of online insurance plans has made things much easier. They can search for and buy online insurance policies with just a few taps on their smart devices or a couple of clicks with a mouse. Undeniably, buying online insurance plans make for an advantageous option for policy buyers in several ways.
What is Online Insurance?
Online insurance purchase is a modern, advanced method of buying insurance policies using the power of Internet. It is an alternative to the traditional offline mode of purchasing insurance policies.
As an online insurance policy buyer, you need not visit the nearest local branch of an insurance company to buy or renew insurance plans. Neither do you need to call a local insurance agent to buy the policy on your behalf. You can simply look for the most suitable online insurance plans from the comfort of your four walls and buy them with ease.
Online insurance plans are highly preferred by people from all walks of life. It is easier for them to understand the diverse aspects of an online insurance policy before buying it.
What is Online Insurance?
Online insurance purchase is a modern, advanced method of buying insurance policies using the power of Internet. It is an alternative to the traditional offline mode of purchasing insurance policies.
As an online insurance policy buyer, you need not visit the nearest local branch of an insurance company to buy or renew insurance plans. Neither do you need to call a local insurance agent to buy the policy on your behalf. You can simply look for the most suitable online insurance plans from the comfort of your four walls and buy them with ease.
Online insurance plans are highly preferred by people from all walks of life. It is easier for them to understand the diverse aspects of an online insurance policy before buying it.
It is their knowledge and understanding of these policies that help them make informed choices. The online insurance mode is beneficial for insurers as well. It brings them closer to prospective buyers and allows them to understand customer needs better. That is why most insurance companies offer online insurance plans along with selling them on offline distribution channels.
Why Should You Buy Online Insurance Plans?
A decade ago, it was obvious for people to call an agent or visit a branch office to purchase an insurance. However, things have changed drastically with the availability of online insurance plans. It will be right to say that the insurance sector has evolved for the better in the digital era.
Now, you can buy online insurance plans within a few minutes and in a hassle-free manner. People who are accustomed to the traditional offline mode of insurance purchase need to know about the perks of buying online insurance plans
1. Easy Comparison of Online Insurance Plans
Before buying an insurance plan, it is crucial to check its benefits, premium, and various other factors. The facility to buy online insurance plans support making an informed decision. After you have compared several online insurance plans, you can select the one that matches your needs.
2. Money Savings
When you buy an online insurance plan, you connect with an insurer directly. In other words, you skip the traditional step of calling a local agent, which helps the insurer save money on the commissions payable. The insurance companies pass this cost-saving benefit to the policy buyers by offering online insurance plans at comparatively lower rates.
3. Convenience
With online insurance plans, you get the convenience of buying them whenever you want to from wherever you are. You can simply use a laptop or smartphone to check for suitable online insurance plans as per your comfort. The online insurance mode is highly beneficial for those individuals who get less time to plan for financial security of their loved ones because of their work life.
2. Money Savings
When you buy an online insurance plan, you connect with an insurer directly. In other words, you skip the traditional step of calling a local agent, which helps the insurer save money on the commissions payable. The insurance companies pass this cost-saving benefit to the policy buyers by offering online insurance plans at comparatively lower rates.
3. Convenience
With online insurance plans, you get the convenience of buying them whenever you want to from wherever you are. You can simply use a laptop or smartphone to check for suitable online insurance plans as per your comfort. The online insurance mode is highly beneficial for those individuals who get less time to plan for financial security of their loved ones because of their work life.
4. Quick Online Insurance Receipt
In the online insurance purchase mode, you receive a copy of the insurance policy almost instantly along with the premium payment receipt. The receipt and online insurance policy are delivered to your email address soon after the insurance payment is processed. This is particularly useful when you need immediate receipts for tax planning.
How to Select the Most Suitable Online Insurance Plan?
The right selection of an online insurance plan is imperative to always be prepared for challenges and the various uncertainties of life. Hence, it is crucial to know about parameters that you need to consider to protect your family or yourself against financial insecurity.
Especially when you buy online insurance plans offered by life insurance companies, the plan you choose will directly impact the financial future of your family members.
Here is how you should proceed to buy an online insurance policy:
1. Research About Available Online Insurance Plans
There are multitudes of online insurance plans available in the market. Depending on the type of online insurance plan you want to buy, gain knowledge about it first.
Start researching about the importance of that plan in life and how you can get maximum benefits.
For life insurance plans, you should know how these online insurance plans work and choose the one that fulfils your needs.
Your knowledge about online insurance plans will prevent any future hassles during claim settlement.
1. Research About Available Online Insurance Plans
There are multitudes of online insurance plans available in the market. Depending on the type of online insurance plan you want to buy, gain knowledge about it first.
Start researching about the importance of that plan in life and how you can get maximum benefits.
For life insurance plans, you should know how these online insurance plans work and choose the one that fulfils your needs.
Your knowledge about online insurance plans will prevent any future hassles during claim settlement.
2. Assess Your Needs Before Asking for Peer Recommendations
The need for an online insurance plan in your life may be different from that of your peers. For instance, your friend might have chosen a pure term plan as he only wanted to create a financial cushion for his family. However, you may want an additional income source and life cover, for which the same plan may not be the right choice.
Hence, you should select an online insurance plan based on your income, financial liabilities, and life goals.
3. Know the Right Time or Age to Buy Online Insurance Plans
One of the most frequently asked questions is about the right time to buy various online insurance plans. The answer depends on the specific type of online insurance plans that you want to buy.
For online life and health insurance plans, your age matters a lot, which is why you should buy them at an early age. On the other hand, you must buy an online insurance plan for vehicles just after you have bought them. It helps you deal with the uncertainties that prevail while driving the vehicle.
4. Check Claim Settlement Ratio (CSR) of the Insurers
A significant factor to consider while buying online insurance plans is the insurers’ CSR. This ratio can tell you more about the total claims settled by an insurer in a specific year. A 98% CSR of an insurance company means it has settled 98 out of every 100 claims filed by the policyholders or nominees.
You can check the exact details of CSR of various insurance companies in the IRDAI’s Annual Report. Compare the CSR for subsequent years to get a better understanding of their commitment towards the policy buyers.
Factors That Affect Online Life Insurance Cost
Factor #1 Age
Your age is one of the primary factors influencing the premium of online insurance plans for life cover. From the insurer’s perspective, the chances are high that a young individual will continue the online insurance policy for more years to come. Also, there is a low risk of suffering from various critical illnesses at a young age, which makes a young person eligible for adequate life coverage at lower online insurance premiums.
Factor #2 Gender
Next to the age-factor, gender is another determinant of online insurance pricing. Life insurance companies consider statistical data about how long an individual will survive in the long run.
Factors That Affect Online Life Insurance Cost
Factor #1 Age
Your age is one of the primary factors influencing the premium of online insurance plans for life cover. From the insurer’s perspective, the chances are high that a young individual will continue the online insurance policy for more years to come. Also, there is a low risk of suffering from various critical illnesses at a young age, which makes a young person eligible for adequate life coverage at lower online insurance premiums.
Factor #2 Gender
Next to the age-factor, gender is another determinant of online insurance pricing. Life insurance companies consider statistical data about how long an individual will survive in the long run.
The data shows women live around five years more than men, on average [1]. This is why women can buy online life insurance plans at comparatively lower premiums than men.
Factor #3 Health Condition
The underwriting process for all life insurance companies includes a complete medical examination of the policy buyer’s health. Medical tests give them a clear picture of an individual’s health condition and list out existing critical illnesses, if any. Accordingly, they offer online insurance plans for life coverage at specific premiums.
Factor #4 Type of Life Insurance Policy
Not every life insurance policy offers the same coverage. It depends on the type of online insurance plan you buy. There are several types of life insurance policies available, be it term insurance, whole life insurance, ULIPs, and endowment plans.
The total cost or premium of an online insurance plan for life cover depends on the combination of chosen policy type and specific features like sum assured, policy period, etc.
Factor #5 Additional Online Insurance Riders
You can enhance the coverage of an online insurance policy by including riders to the base policy at an additional premium. These riders are meant to add another layer of insurance protection to your policy. The more rider you add to an online insurance plan, the higher will be the insurance premium.
How to Calculate Online Insurance Premium
Online insurance premium depends on several factors. Particularly for life insurance policies, the simplest way to get an estimate of online insurance premium is to use calculators available on the insurer’s website. These online calculators can help you get a premium estimate of life insurance plans based on your needs.
Follow these steps to use an online insurance calculator:
- Visit the life insurance policy page you want to buy and use the online insurance calculator linked to that page.
How to Calculate Online Insurance Premium
Online insurance premium depends on several factors. Particularly for life insurance policies, the simplest way to get an estimate of online insurance premium is to use calculators available on the insurer’s website. These online calculators can help you get a premium estimate of life insurance plans based on your needs.
Follow these steps to use an online insurance calculator:
- Visit the life insurance policy page you want to buy and use the online insurance calculator linked to that page.
- Enter personal details like age, name, income, and lifestyle habits.
- Select sum assured, policy period, and premium payment period for the selected online insurance plan.
- Add riders that match your needs.
It will give you an estimate of the online insurance premium payable to purchase the plan.
Steps to Compare and Buy Online Insurance Plans
Step 1>
Make sure you analyse your requirements carefully before selecting an online insurance plan. Decide if you want basic life coverage or additional benefits as well with an online insurance policy.
Step 2>
Compare online insurance plans from different brands. Keep the list of parameters handy for quick comparison.
Step 3>
Use online insurance calculators to adjust coverage and other variables. Look for the best online insurance plan that offers maximum benefits at a price you can afford.
Step 4>
Go through the features and benefits of the top three-four online insurance plans in detail. Make a list of questions that you would like to ask about these plans and connect with the customer support team.
Step 5>
Once you have selected an online insurance plan, proceed to buy it online on the insurer’s website. Verify the details of the purchased online insurance policy once you receive it offline. In case of any discrepancy, connect with the insurer and get things changed at the earliest.
Source:
1. https://pubmed.ncbi.nlm.nih.gov/23331196/
ARN: PCP/OIP/18102022