E-commerce has changed the way business is done. Be it groceries or electronics, you can now purchase it online at the click of a button. As more and more people are getting hooked to online purchases, the insurance industry is no behind and seeing a steady increase in the number of people buying insurance online.
Buying a policy is an important decision and apart from purchasing the right policy which meets all your requirements, it is equally important that the mode of purchase is easy and convenient for you. To make the decision regarding online or offline purchase here is a list of benefits and limitations of buying insurance online to help you make an informed decision.
Advantages of purchasing online insurance
Whenever we buy any product, it is natural to compare the same products on the basis of cost involved in making the purchase. Buying an insurance policy is no different. In case of online policies, the policy is bought directly by you and the insurance company does not have to incur any intermediary costs, making it cheaper for you. However, in case of offline policies, a certain percentage of premium goes towards the commission of agent which in turn results in higher premium. Online policies also help to save up on the paper cost. On an average, online policies are 40% cheaper than offline policies.
Higher Sum Assured
Because of the lower costs involved in case of online policies, you get a higher sum assured in case of an online policy as compared to policies bought offline.
Compare various policies online
You can get all the information regarding all the policies which are available from different companies online. There are many online portals which can assist you in comparing various policies depending on your requirements and help you find the plan which is most suitable for you at the lowest cost possible. You can also see the reviews of the policies online and make an informed choice.
No scope for misselling
Though the business of insurance is based on utmost faith, misselling of insurance policies is a common practice when you buy a policy offline as most of the times the agent will discuss only those policies which have a higher commission or those in which they have vested interest.
Ease and convenience of time to take decision
Buying life insurance is a big financial decision and should not be done in haste. It is a long-term contract and you must be fully aware of all the policy details before you buy it. You should buy a policy after having gone through all the terms and conditions of the policy. In case of offline purchase because your agent has been following up endlessly you end up buying a policy under pressure without fully understanding it. In case of online purchases, you have not made any commitment to anyone and as per your ease and convenience you can buy the policy when you want. Once, you have made the decision you can instantly make the purchase online.
Disadvantages of online insurance
No modification of plans as per individual requirement
In online plans, the plans are plain vanilla products which are pre-set and cannot be modified as per your individual requirement.
No agent’s assistance in claim settlement process
In case of an online plan, in the event of the death of the policyholder, the nominee will have to directly get in touch with the company to initiate the claim settlement process as there is no intermediary involved. So if you have dependents, who are not equipped on how to go about claim settlement in the event of death, it can create a problem.
Buying life insurance online has several advantages as it is not only cost-effective, but also the process of buying is much faster and hassle-free. It is best suited for people who have an understanding of the insurance product that they are buying. Besides, they are, rest assured that in case of an unfortunate event, their family is well-equipped to take care of the claim process by themselves without the need of an agent. However, if you feel you are not well equipped to take the decision on your own and need consultation and want to be sure that there is someone to help your family in case of an emergency it is better to opt for an offline plan through an agent.
Recommended Read: How much life insurance do I need?
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