Mistakes to Avoid While Buying an Online Life Insurance Policy

Due to the amplified penetration of internet in India, buying an online insurance plan is faster, convenient and much cheaper than buying through the traditional sales channels. All you need a steady internet connection to fulfil your insurance needs. The technological superiority provided by the online platforms makes the application process of insurance smoother. Generally, the online insurance providers offer live chat facilities and toll free numbers to ensure that the customers don’t face any problems while purchasing an online policy. However, in order to have a smooth post purchase experience, make sure you avoid these common mistakes while buying online insurance policies:-

1.       Providing wrong information or omitting facts: –

When you fill up the physical insurance policy forms, an insurance agent will always double check the details that you write down. However, while filling an online insurance application, there might not be any agent around to oversee the information. Nevertheless, the function of this information remains the same during the claiming process. If the information that you provided is found to be misleading or faulty, you claim might be rejected entirely. Most of the insurance providers deny insurance to policyholders who provided the wrong information. Sometimes, providing wrong information or omission of facts may also lead to lawsuits if the policy holder has distorted important facts. Therefore it is very important to be upfront about every little detail and get all the facts right as even a minor lie can lead to rejection of claims.

2.       Not doing enough research before buying: –

 As there are several types of life insurance policies available in the market, it is very important to undertake adequate research before buying. There are many aggregator websites that let you make quick comparisons of the costs and features of different policies. If you buy an insurance plan without proper research, you may most likely end up with a policy that is average and does not suit you needs. With proper research, you will be able to understand the features of the policy entirely and purchase the one that is most suitable.

3.       Overlooking policy renewal: –

When you take up a life insurance policy through an insurance agent, he will remind you regularly about the premium renewal dates. However, in an online insurance policy you need to remember the dates in order to save your life insurance policy from lapsing. Another way is to have your bank renew the policy at a scheduled date and month. On the other hand, make sure you have enough money in your bank account.

4.       Overbuying Insurance: –

 Most of the people tend to overbuy Online Term Insurance Plans In India because of the low premium rates. If you are paying for coverage that is not needed, it becomes a wastage. For instance, iMaximize plan from Life offers extensive returns with life cover. Opting for an additional insurance plan along with it will only put pressure on your monthly budget. Therefore, while buying online policies, don’t let the low premiums be the conclusive factor while buying an insurance policy.

How to buy term life insurance online?

Buying insurance is seen as time-consuming even cumbersome. So while individuals appreciate the importance of taking insurance, the formalities can be a put-off, making them postpone the decision.

Online saves the day

Thankfully, we are in an age where practically nothing need be time-consuming and cumbersome. The internet has taken care of that. You can now browse insurance company websites and buy online term insurance plans, which is a popular and affordable form of insurance.

Why term plans

To revisit the attraction of term plan for individuals –online term plans offer the cheapest medium of availing life insurance where one can get a high life cover at a relatively low premium.

How the internet is spreading insurance

The internet has graduated from being a mere provider of information to a key distribution channel for service providers like insurance. It offers a fast, efficient, cost-effective and transparent mode of delivery. While traditionally, insurance companies have relied on consultants, agents and brokers, in addition to their own in-house sales support, this has proved to be both expensive and inefficient. The turnaround time in getting an individual insured is high and there is a burden to service the agent through regular commissions over the life of the policy.

The internet has helped insurance companies iron out both time and cost inefficiencies. They now engage insurance-seekers directly through company websites. Insurance is ‘delivered’ seamlessly and since there is no agent involved, there is no commission to be paid. This makes selling insurance cheaper and the individual benefits by paying a lower premium vis-à-vis a similar policy sold offline.

How to buy online term insurance plans

Buying the best term insurance plan in India online is a simple, streamlined experience that will make you wonder why it was not discovered earlier.

While the process of buying online term insurance varies across insurance companies, it broadly involves the following steps:

1.       Log on to the company website for e.g. log on to www….com  and click on the banner advertising online insurance

2.       Enter the sum assured

3.       Choose the policy term

4.       Choose the premium paying term

5.       You will see the premium amount based on your inputs

6.       Select your bank to make the premium payment

7.       You will see an acknowledgement on a successful transaction

8.       Within a period of usually three weeks the insurance company will come back to you on whether or not your insurance policy has been approved by its underwriting team

9.       Subject to approval you will receive a soft copy of the policy which will be followed by a hard copy

The mark of a good online experience is fewer clicks and website speed. The lesser number of clicks necessary to buy insurance, the simpler it becomes for users. And slow website speed with higher response time while navigating to the bank website for premium payment, can be a turn off.

Top reasons to buy insurance online

With the ongoing reforms in the insurance sector in India, there are dozens of life insurance service providers operating in the country. Every company has a bouquet of products and each one of them try to put forth their offerings. Today most companies are promoting online channels to promote their products.

In this scenario when the companies advertise their products through this widely used media, it becomes confusing for a person who wishes to buy term insurance. Here are the top reasons which you must gauge in order to arrive at a prudent decision.

Right information: Buying insurance through agents is fraught with wrong information. Agents have their own vested interests in promoting certain set of products. There may be different reasons why they promote them. It may be higher commission, target-related benefits, so on and so forth.

But when you buy insurance through online media, you get the information directly from the insurance company. This information is openly available in the public domain. If you have any queries, you can simply drop an email to the customer care cell of the company and they reply to you. You can also feed in your phone number for a call back from the company.

Comparability: The proliferation of online media has paved way for web aggregators which provide genuine information on the various insurance products without any prejudice. They also provide efficient web applications that help compare the various insurance products. Before you go for online comparison, you may rather shortlist a few insurance policies so that you compare them rationally in one go.

This is unlike working with agents where you are supplied with a very limited amount of information. They are mostly having one or two insurance companies and thus they avoid talking about other products.

Cost efficient: Needless to say that online buying is cost efficient. But you may say that it is cost efficient for the company. How does it matter to you? It does – because ultimately the benefit is passed on to you in some way or the other way.

Also, it is very effective in terms of keeping track of your investment in insurance. You get an Online Term Insurance Plans In  India through which you can check the updates related with your insurance policy.

Higher sum assured: There are chances that you may not get lower premium amount on insurance policy. You may feel that there is no benefit in buying insurance through online mode. But there may be indirect benefits associated with online transaction. You may be receiving higher amount of coverage in the same amount of premium. 

Source: http://www.policyx.com/blogs/part-i-top-reasons-to-buy-insurance-online/  

People Preferring Term Insurance Plans With Allied Features

With increasing policyholder’s interest in buying term insurance plans, insurance companies have started offering allied features with it. Term insurance plans have no longer remained just plain vanilla plans.

Pure protection plans pay nominees the pre-fixed amount in case of policyholder’s death. Of those online buyers, a majority prefer to choose term insurance as they are easy to understand and buy.

Increasing number of people is opting for online term insurance plans to benefit from lower premiums. Online term insurance plans are approximately 30% cost effective compared to offline plans. But price is not the only criterion any more to opt for online term insurance plans. Customers understand the importance of benefits, ease of buying and claims experience of company.

Additional features too drive their decisions. Given changes in life expectancy, people are looking for longer coverage and want to enhance cover through riders.

Customers are doing much more research before buying a  Online term insurance  plan, aided by internet. The decision making for customers has also become much faster. Here are some popular additional features that people opt for with term insurance plans:-

Increasing sum assured: When it comes to longer-term investments, inflation is an important factor to consider. To protect the sum assured from proving insufficient years later due to inflation, option that increase the sum assured over a period are being preferred. Few companies offer this as rider currently. But similar plans which increase sum assured at various life events are available. Options to increase cover in term insurance are meant for those who want to increase the protection cover at different life stages like marriage, child birth, etc.

Return of premium: This option is for those people who expect something in return from their every investment. For those survive beyond the term insurance policy tenure, term insurance would seem to be a wasteful expenditure. To fix this, an option of return on premium was initiated by some insurers. Such feature helps the policyholder get the premium back at the end of the tenure. Even though they are costly, the return on premium riders are being opted by individuals.

Staggered maturity payment: When it comes to maturity amount or death benefit, the payment of staggered payments over five-ten years instead of lumpsum benefits is being opted for. Policyholders are opting for a mix of income (staggered maturity payment) and lumpsum.

Policy tenure: Term insurance plans are available for a period of as low as 5-10 years. But people are often opting for the higher end. Typically, one should seek protection based on the retirement age. However, one can lock-in at lower premium if they buy insurance at younger age; the tendency has been to opt for longest possible tenure.

Salary replacement: There are covers available to protect one from loss of salary due to disability, accident, etc. This option takes away the uncertainty from the minds of the beneficiaries. Increasing benefit option (5% rise in insured amount every year) under a salary replacement plan also addresses inflation and rising cost of living.

Which Company To Choose To Buy Term Insurance Plan

Term Insurance Plans are the best plans to cover risk of life. Term plans not only provide high risk cover but with less premium in return. With increase in the Insurance companies premium for term plans differ very much. Difference in the premium can be double between lowest to highest, this puts the person taking insurance in dilemma of which company is best to take Term Insurance Plans.

Key to choose the company to take Term Insurance Plan is not the premium is be paid, but the performance of the company toward claim settlement. Term plans do not provide any returns to policy holder if survives till the end of the term, it is only taken to provide the financial security to you loved ones. What if the claim is denied to you nominee?

Following things to be kept in mind before choosing right insurance company to buy term plan

Claim paid percentage must be greater than 90% for both numbers and amount.

Don’t see the number of claim settled, but also the amount of claim settled too. It shows whether higher sum assured plans are settled or not.

See if higher amount is pending at the end of the year, Means Company is taking too much time to settle the higher sum assured plans.

Above data do not show reason for rejection of claim, rejection can be due to genuine reasons, therefore data should be used wisely to arrive any final conclusion.

Do not go for low premium only.

Older a bigger companies have good claim settlement ratio and faster settlement process too.

Choose a company with a better network.

If you are planning to buy the plan online, then make sure the office of the insurer is in your town or very near to you to avoid any inconvenience later on.

Read the terms and condition as soon as you get the policy bond.

Your decision to take the Term Insurance Plan is to secure the future of your loved ones when you will be not with them, so take right decision while taking the term plan so that they don’t have to suffer or denied to take the claim amount.

Source: http://blogterminsurance.tumblr.com/post/143572757586/which-company-to-choose-to-buy-term-insurance-plan

What is Term Insurance?

Term insurance can be defined as a type of insurance that is availed for a certain period of time or a fixed term (number of years). The basic differentiating feature of term insurance is that unlike other types of life insurance policies, a term insurance policy is less expensive since it does not have any cash value. The policy comes useful only if the policyholder dies within the timeframe during which the term insurance policy is in force.

Term insurance policies are offered by almost all major insurance providers and these come for various terms like 10 years, 20 years, 30 years etc. The most significant point about term insurance policies is that most of these policies have a built-in feature to get converted to permanent life insurance policies irrespective of the state of health of the term insurance policyholder.

How does Term Insurance Works?

 What is Term Insurance?

A term insurance policy can be considered one of the most traditional forms of insurance. To understand how it works, you can look at it in these three situations:

Buying the policy: To be able to buy a term insurance policy you don’t need to put aside tens of thousands of rupees every year. Many of the insurance policies can offer you a sum assured of up to Rs. 1 crore for a premium that could be as little as about Rs. 10,000 per annum (These are indicative figures. The actual premiums may differ depending on the sum assured and the insurance providers).

Keeping the policy: Just like any other insurance policy, you pay the premium towards these policies at a frequency chosen by you. These premiums can be paid every month, every quarter, every 6 months or once a year. They can also be paid as a lump sum instead of being paid at regular intervals.

Redeeming the benefits: Term insurance plans don’t typically come with any maturity benefits, except for term insurance with. Their main objective is to provide life insurance cover and that is exactly what they do. In case the policy holder passes away, the person who is named as the beneficiary of the policy will receive the sum assured.

The way it works is also one reason why you will notice that a lot of the time insurers refer to these plans as pure protection plans. There are no frills attached to the plan. You pay the premium and you get a fixed sum if case something happens to you.

How to choose the best term insurance plans?

When it comes to choosing the ideal term insurance these are the steps that you should follow.

Step 1: Calculate how much you want the sum assured to be.

Step 2: Decide if you wish to take a policy with return of premium or not.

Step 3: Choose an insurer that will offer you the sum assured you want.

Step 4: See the premium that each insurer will offer for the chosen amount.

Step 5: Check the claims settlement ratio of the insurer. This is a step that many people tend to ignore but is absolutely critical to getting the right insurance policy. This is information that tell you the percentage of the claims that the insurer has honoured vs the number of claims they received in a given year.

Step 6: Compare the information you have gathered and choose the plan that suits

Features & Benefits of Term Insurance:

The features and benefits that are offered by term insurance plans can differ from one insurer to another. They can also differ from one type of plan to another but there are some features of benefits that remain the same no matter who offers the policy. These are:

·         Regular term plans and TROPs offer very high sum assured for a very reasonable premium.

·         There is no limit on the maximum sum assured as it is something that will depend on the insurer’s willingness to underwrite really large sums.

·         The policies offer premium payment options of single pay, regular pay and limited payment.

·         The payment of premiums, in case of limited and regular pay plans, can be monthly, quarterly, semi-annual and annual. However, in the case of monthly payments, the insurers may require you to pay the premium for the first 3 months as a lump sum.

·         They come with a tenure than can be as high as 20 years or more, depending on the insurer.

·         With a return of premium policy, some insurers will offer 105% of the premiums paid as the maturity benefit.

·         A lot of these plans can be bought online too, which negates the tedious task of meeting an agent and fixing meetings.

·         All Online Term Insurance Plans In India are cover by Section 80C of the IT ACT which means that the premiums paid for them are eligible for income tax benefits.

·         The benefits received from term insurance plans can be covered under Section 10(10D) of the IT Act will also be eligible for tax benefits.

·         Some insurers also offer rebates if policyholders opt to go in for high sum assured.

·         Many of the insurance providers offer lower premium rates for those who maintain a healthy lifestyle.  

Source: https://www.bankbazaar.com/insurance/term-insurance.html  

5 Questions You Need To Ask On Term Plans

If you’ve ever sat for hours in front of a Las Vegas slot machine plunking in coin after coin and waiting for those four 7’s to ching-a-ling into view, you know what it’s like to keep paying premiums towards your term plan without ever seeing a penny in return.

Why then do people buy term insurance plans?

Term plans are the simplest among various life insurance options. It is one of the most demanded insurance products both online and offline simply because it’s cheap and consumers are convinced about its benefits.

However, there’s another side to this term insurance story. Claim rejections and premium payment dropouts are happening in many more cases than expected. This is because many insurance buyers seeking term plans are not asking themselves some rudimentary questions before buying.

We give you five such questions.

Do all term plans give lifelong cover?

It’s a myth that term plans offer lifelong coverage. Insurance policies are generally designed to offer protective coverage for a person till he pays the premium and there will be a maximum age limit as specified in every plan. Most insurance plans come with an entry age limit of 60-65 years and offer coverage till 75 years.

However, some company offering whole life policies. Most of them provide lifelong coverage as long as you pay the premium. But some, Life Long Term Plan, offer coverage till 80 years only. So, read the fine print before you ink the large print.

Do term plans include personal accident cover? 

Term insurance plans are basic life insurance plans with the lowest premiums and high coverage for the incident of death of the insured. They are designed in such a way that they provide the family with lump sum compensation in case of death of the insured. Most term plans offer the same assured cover irrespective of the cause of the death, except the exclusions (as cases of suicide), as specified in the policy. But many people think that accidental deaths have special consideration under a term plan.

If you wish to get additional cover, such as double sum insured in case of accidental death or permanent total disability, you have to choose a rider. For example, if you are choosing ICICI Pru iProtect Plan, a usual coverage of Rs.50 lakhs for a 35-year-old individual is available at a premium of Rs.7,000, whereas a double protection of accidental cover comes at Rs.9,700.

Is suicide covered under a term plan?

Death by suicide is not usually covered by most term insurance plans. However, some policies cover it after 1-2 years. It all depends upon the policy you choose and its terms and conditions. Apart from death by suicide, death due to any sort of self-inflicted injuries or by voluntary participation in dangerous hobbies are also either not covered or covered with certain conditions under a term insurance plan.

What is the investigation procedure for accidental death? 

Term life insurance plans pay the sum assured in natural, accidental as well as death due to critical illness. They also cover death occurring outside the country. But if a claim arises within the first two years of buying the policy, or if it is death occurring due to unnatural circumstances, like an accident, the company investigates extensively before settling the claim.

Each company has its own investigation procedure and a panel of medical professionals to investigate unnatural death claims. The company seeks information including copy of police FIR in case of accidents or medical report indicating the cause for death by illness, along with a written statement outlining the date, location and circumstances of the accident. The investigation is carried out on the basis on these reports.

What if death occurs due to a lifestyle disease?

In the event of death happening due to any lifestyle disease like smoking or overdose of alcohol etc, the insurance claim can be denied if the insured has concealed the information from the insurer. Smokers, people consuming alcohol, and those having lifestyle diseases like obesity, high blood pressure, etc. are generally categorized in a different risk pool and charged a higher premium as compared to others.

So these pre-existing medical conditions, if any, need to be mentioned in the application form of the insurance, and the policy will be approved after medical tests or at a higher premium. But, concealing the same at the time of buying the insurance and subsequent discovery can lead to claim rejection.

A term insurance policy offers a higher insurance cover at very low premiums, making it ideal for every individual. Depending on our financial scenario and liabilities, you can choose a term ranging from 5-30 years for a term plan.

But, know the claim terms and the claim process before you buy. You don’t want to end up spending hours at the wrong slot machine, do you?