Do you know the popularity of the online media? With telecom companies offering affordable data plans atlightning speed, internet has evolved not only on our desktops or laptops but also on our mobile handsets. We now carry internet in our pockets and the whole wide world has shrunk down to fit our mobile screens. Even in case of buying something, internet allows ease, convenience and above all financial savings. When everything is available for buying online, why should life insurance be left behind?
Life insurance plans, especially term plans, are increasingly being sold online. Online aggregators, brokers and life insurance companies sell online term plans. Offline plans, on the other hand, are sold primarily by agents, offline brokers or other distributors. Though the plans offered are same, there are some factors which differentiate online term plans from offline ones. Let’s understand these differences:
Offline term plans
Plans sold by agents and other distributors have certain disadvantages which include the following:
- The plans have a higher premium
The insurance company is liable to pay commissions to middlemen (agents or other distributors) on the plans they sell. This commission cost is transferred to you, the customer, as a part of your premium component. Thus, offline plans prove to be dearer than online ones as online plans are sold directly.
- There is limited or no scope of comparison
Agents sell insurance plans of one insurance company. Even other offline distributors, who might represent more than one insurance company, have limited plans to offer. Furthermore, you do not get the facility of comparing the available term plans in the market. This lack of comparison might deprive you from buying the most suited term plan at the best premium rate.
Despite these disadvantages, there is an advantage to offline term plans. Since agents might be known to you and your family, they render personalized services to you. They also promise assistance at the time of claim which is a big relief to your family who might not know how to make a successful claim when you are not around.
Online term plans
Online term plans are bestowed with multiple advantages which are as follows:
- Lower premiums
The first and the most important benefit of an online term plan is the promise of lower premiums. Online plans are sold directly by the insurance company thus eliminating middlemen. Since middlemen are eliminated, the commission payable to them is also removed from premium calculations. As such, the premium payable are lower in online mode.
- Wider choice of plans
The online medium also allows you to see all the available plans in the insurance market. You can compare the available plans against their benefit structure and the amount of premium charged. After comparing the available plans, matching them with your suitability and then buying one would ensure that you get the best term insurance plan. You can buy a plan you need and not the one which you are sold. What’s more, you can also get the cheapest premium rate when you compare online.
- Ease of purchase
Online plans can be easily bought by filling up the proposal form online and paying premiums online itself. No more running around the agent or insurance company to buy the plan. If no pre-policy medical check-ups are required, you also get the policy instantly online.
Despite the above-mentioned advantages, there is one distinct disadvantage inherent in online term plans. Since they are sold online, you have to raise your claims yourself. There would be no agents helping you with your claim settlement.
Which is better?
Online term plans are better. The lower premiums they promise are good for your pockets. Moreover, you can independently choose a plan suitable for your requirements rather than buying one which your agent or other distributor is trying to sell you. Thus, online term insurance plans ensure a plan suitable for you and your pockets. If claim assistance is a bone of contention, you can choose reputed online brokers who will help you in the process of claim settlement. Coverfox is an online broker which eliminates the need of agents for claim settlement. Coverfox has a dedicated claim assistance department which helps you at the time of claim. So, you can buy an online plan easily from Coverfox after comparing without worrying about getting your claims settled. So, the next time you buy a term plan, try online and see the benefits yourself.