Categorized | Term Insurance

why online term plans are cheaper?

Nowadays, online Term insurance plans are getting more and more popular. There are around 8 insurance companies which offer an online Term Insurance plan. It has been seen that online term plan is cheaper as compared to the traditional insurance.

Term Insurance or Pure Protection Plan

Term insurance plans are also known as pure protection plans and are arguably the cheapest ever life insurance available. The term insurance as the name suggests covers the Risk of death for a fixed number of years which is known as a term. There are various terms and clauses, out of which one of those is that if the Policyholder survives the entire term then the insurance company is not liable to make any payment. There are loads of online term insurance plans which are available in India. These term insurance plans normally are 3/4th of the cost of other insurance available in India and are best suited for people who are looking for an insurance Policy in a limited budget.

Reason for taking an online term insurance policy

•Term insurance cost higher if you buy it from an agent or middleman
•The primary reason is commission and admin costs.

In case of an online policy, you need not seek help from a middle man as all the conditions and rules are well specified in the terms which are very much clear and easy to understand.

In case of insurance policy, agents and the middle man plays a very important role as an insurance policy is an investment tool and has lots to do with finance which not every body is well versed with financial knowledge and therefore has to seek the help of somebody who has a good knowledge of all the rules and regulation.

These agents are known as insurance advisors and charge a fee or a common in lieu of the services they offer. In case of an online term plan a person can simply log on to the website and get a clear knowledge of the plan. In case of any problem they can call up the toll free number and seek advice which is free of cost. Hence the extra cost which is borne on commission and admin cost of insurance agents is saved.

You can save a lot of money by buying term insurance online

Following are the three factors which play an important role in bringing the cost of an online term plan down

1.Distribution cost
Due to no distribution cost among the agents and the policyholder, makes operation of the online term plan cheaper

2.Operational cost
Since everything is done online and there is no use of maintaining files and folders in physical form. There is no additional cost in handling couriers and important document, these all can be done online, hence the operational cost comes down drastically.

3.Profile of online customers
Since the youth are more internet friendly and maintain a healthy profile, hence the mortality rate is low and hence operational cost reduces.

All these factors bring about a reduction in the Premium and make it more lucrative.

You can switch your existing plan that too online without the help of anybody 

There are online insurance portals through which you can switch your existing plan to another plan of your choice keeping in view your requirements. In order to do that, a Proposal form needs to be filled and then a premium rate is decided after keeping in mind all previous history. While doing so all the previous and existing insurance policies need to be disclosed.

Once all the documentation is done, then the offline process start that is medical test are conducted and within 2-7 days you get all your policy documents.