subject: Should I Go For An Online Or Offline Term Plan? [print this page] Term insurance plans are considered an important part of every financial portfolio. Compared to other policies such as ULIP, Endowment or Money Back Policy, which provide the same financial cover, the premium in a term plan is much lesser.
A term plan does not have an investment attached to it and the entire premium is used to insure the risk. All these factors have contributed to the popularity of term insurance plans in India.
In order to capitalize on this demand, insurance companies in India offer various types of term plans to customers. While some companies offer these plans only offline, most companies have jumped on to the e-commerce bandwagon and offer online term plans. The main difference between an online and offline term insurance plan is the premium, which is lesser by 30 to 40 percent in online plans. The premium in an offline term plan is loaded with agents commission and office expenses which gets saved when you purchase a policy online. Typically an agent earns a commission of around 30 percent in the first year of the policy and around 2 to 7 percent thereafter in an offline term plan.
In spite of the premium in an online plan being cheaper than the offline one, investors have a lot of apprehension in purchasing policies online. The concerns mainly revolve around claim settlement, customer support and servicing of the policy. While these are all valid concerns, they are equally applicable even if you purchase the policy offline.
Mentioned below are a few factors, which you should evaluate before purchasing a term life plan:
Claim Settlement Ratio
This is a good indicator of how quickly claims are settled by the insurance company. The ratio depicts the number of claims settled by an insurance company out of every hundred claims received. Thus, a high ratio implies that a majority of the claims are being settled by the insurance company.
Customer Reviews and Customer Service
There are various investor and insurance related discussion forums on the internet. Do remember to check reviews from customers who have either purchased the same policy or another policy from the same company. Coupled with reviews on customer service, this is a good indicator on how the company services its customers and treats claims.
Compare Various Policies
Finally, visit websites which compare the features and premiums of all insurance policies available in the market. This will go a long way in helping you make an informed decision.
Whether you purchase an offline or online term plan , remember to research various products properly, so that you do not regret your decision later.
by: Sudeep Desai
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