Conventionally, people have not been too keen on adopting online methods for essential services such as banking or insurance. A majority of apprehensions regarding online transactions revolve around the lack of security, which is now, but a myth. As the world has progressed with time, sophisticated technology has made it possible for us to do a lot more online. As more and more awareness spreads, an increasing number of people are breaking away from their dependence on agents, consultants, brokers, and sales reps for the purchase of insurance policies online. With the steady growth in digitization of the insurance sector, people are becoming increasingly aware of the benefits which accompany buying insurance online. As opposed to the to-and-fro involved in purchasing insurance from an agent or sales representative, the online way is not only faster, but also streamlined, and often cheaper, with no agent commissions involved.
Term insurance is no exception to the above. There are several benefits associated with purchasing term insurance online which can help the customer not only save on time, money, and also effort involved. From saving on premiums, to higher sum assured, increased transparency, real-time reviews, access to more knowledge and elimination of chances of misselling, online purchase of term insurance policies is definitely a win-win for not only customers but also insurers.
Convenience is the one single thing which will always sell. Considering this, insurers are offering loads of convenience to their customers by selling policies online as the latter can purchase the policy in the comfort of their house. There is no need for one to run to the insurer’s office, get photocopies of various supporting documents, deal with insurance agents or sales persons. Just by visiting the insurer’s website, one can find out the policies being offered, compare between various similar policies, make their choice and purchase the policy, without having to step outside their house.
Lower cost to insurer:
It is a well-known fact that purchasing insurance online is significantly more cost-effective than purchasing it offline. When it comes to term insurance, a majority of plans are almost 50% to 70% cheaper when purchased online, as opposed to their offline versions. This significant drop in prices is primarily due to the absence of middlemen and intermediaries like agents, brokers, consultants, and sales persons. The complete absence of intermediary costs and direct dealings with the insurer help in cutting costs.
Another factor contributing to the lower costs is that a majority of insurers consider online insurance applicants to have a lower mortality risk, as compared to those applicants who purchase insurance offline. Both these factors help lower the premium rates and allow customers to get more insurance cover.
Greater sum assured:
When taken on an average, online policies generally offer higher sum assured. This is mainly due to the facts that intermediary costs have been eliminated in the process, allowing the insurer to offer greater coverage. Lower costs can also be attributed to customised marketing strategies designed keeping the customer in mind and offering high insurance cover for a remarkably low daily/monthly premium. Another factor contributing to the high sum assured is that medical tests are seldom a compulsory requirement when it comes to online policies. Usually medical tests are only required if the policy offers coverage of over Rs.50 lakh.
Another important benefit resulting from the elimination of intermediary costs is low premiums. As mentioned before, online term plans are able to offer high coverage in exchange for very nominal premiums for the primary reason that intermediary costs of brokers, agents, consultants, and the like, are eliminated with the use of online distribution channels. The insurer saves on these costs and can directly pass the saving on to the customer.
Compared to the offline process, purchasing term insurance online is a far more transparent process. Since the customer is relying on the information that is made available by the insurer, the latter is bound to disclose all information about the product online. Be it the features, term, riders, benefits, limitations, exclusions, customer feedback, or anything else related to the product, the insurer has to provide it all, to make the customer feel confident about the transparency surrounding the process. After the customer has submitted the details for approval, they can track the status of their application and also get to know the remaining steps of the purchase process.
Ease of comparing:
When purchasing anything, one tends to compare between different options of the same product in order to pick out the best one. Term insurance is no different. With the growing use of online platforms for insurance shopping, online insurance comparison websites have become quite popular. With the help of these sites, customers can compare between different policies on the basis of cost, benefits provided, sum assured, premiums, and other important factors. This way they can eliminate the policies which do not fall under their criteria.
These portals have also been reliable sources of information related to insurance policies, which can help customers decide on the policy which is suitable for them. Often, customers also provide real-time feedback on the policies which they have purchased, which other prospective customers can consider when choosing a policy.
Empowers the customer & prevents policy misselling :
Misselling of insurance policies is not something unheard of. Many a time have insurance agents, brokers, and consultants recklessly sold insurance policies to customers where the benefits or terms of the contract have been misstated and the policyholder is left in a fix at the time of making a claim. However, times have changed and so have the conventional methods of purchasing insurance. When it comes to purchasing insurance online, the customer is expected to fill up the forms and submit them, which prevents any chances of wrong information being entered. The customer can also track the progress and status of their application themselves without having to rely on the agent or broker.
One of the features of the online insurance purchase is that it is swift. Within a matter of a few minutes, one can have all information pertaining to a variety of plans, compare between plans, add riders to their policy, register a claim, and also make policy premium payments online.
Before policies were available online, customers were issued hard copies of their insurance policy, which made it cumbersome to carry it around, for the fear of being misplaced, lost, or stolen. However, the online method has made it far easier for one to access their policy whenever needed. The soft copy of the policy is sent to the policyholder’s registered email address, from where it can be accessed anytime, given there is an active data connection. One can also access their policy via their e-insurance account.
Flexibility of making changes:
For policies which have been purchased online, changes can be made with far greater ease, as compared to policies which have been issued offline. It is relatively easy to add, delete, or edit information on an online policy, before or after its purchase. One can make corrections to details like the policyholder’s name, address, contact details, etc.
Read real-time reviews:
As more and more businesses, including insurance, migrate online, users are becoming more proactive in sharing their experiences with products and services which they have consumed. Facebook and Twitter are two of the many online social media platforms where customers share feedback about their experience with a particular brand or company. The insurance sector is no stranger to this practice. Within minutes, one can find reviews about an insurer and their services. With all information available online, it is easier than ever to check an insurer’s reputation, especially when it comes to claim settlements, which is one of the most important influencing factor during insurance shopping.