Offline Vs Online Term Insurance Plan – Which is better option?

Term insurance plays a crucial part when it comes to financial planning. Term Plan is the best way to secure your family’s future as it provides high coverage at lower premium rates. Term insurance plans are designed for risk coverage only. In case of death, the sum assured is paid to the nominee. Your premium depends on age, the sum assured, lifestyle (smoker/non-smoker).

You might be aware that there are two modes of buying term insurance i.e. offline and online term insurance plan. In this article, you would find detailed information about offline vs online term plan and which one should you opt for.

Here are some of the major influential factors to buy a term insurance from these two modes i.e. online or offline.

• Cost of Term Insurance Plan

Online term insurance plans are generally 40% cheaper as compared to offline term insurance plans. Since there are no agent costs or intermediary costs because an individual directly visits life insurance company website online and buys term insurance plans, hence they come with lower premiums. On the other hand, offline term insurance plans are sold by agents. There are commissions which have to be paid to agents or intermediaries; which leads to higher cost of premium. Also, for an online customer is considered to be well aware, educated and transparent; so unknown or hidden mortality risk is almost negligible as they are known upfront while buying term plan through the website, online term insurance plans come with lesser premiums.

• Disclosure of facts

In online plans, an individual needs to fill in all relevant details all by himself. An online consumer is aware of the facts. Hence online plan comes with complete disclosure of facts and term plan is given. On the other hand, in offline plans, individuals could be negligent and depend on agents to fill in the form. Any non-disclosure of facts by agents in the policy could lead to rejection of claim at a later point in time.

• High sum assured at low costs

Online term insurance plan offers a high sum assured as it comes with low costs and zero mortality risk. Online term plans can offer a sum assured which is as high as Rs 5 Crores depending on the applicant’s age, lifestyle and income. On the other hand, not many Offline term plans offer high sum assured and even if they do offer, the premiums would be way too high.

• Flexibility in applying a term insurance plan

Online term insurance plans are more flexible than offline plan. You just have to visit the website, pay a premium and you would get your policy document delivered at home.

The medical procedure is also very convenient and smooth. You can pay premiums online every year. On the other hand, in offline term insurance, you need to do some visits to the insurance company or you may have to depend on your agent for all the procedures. Online term insurance plans score high in terms of flexibility.

• Rider Benefits in Term Plans

Rider benefits are available in both online and offline plans. However, while purchasing offline there are chances that you may not be aware of these add-ons and miss out on an opportunity to protect yourself against accidental deaths or disabilities.

If you observe about offline vs online term insurance plans comparison, it clearly indicates online term plans are convenient, cheaper, flexible and transparent.

 

Chirag Iyer - BFSI Enthusiast

Chirag is a writer and an avid reader who loves to drink coffee! His other interests include boxing, karate, and singing.