Online v/s Offline Term Plans |Which Option Is Better for You?

March 2, 2022 Mutual Fund

Life is full of uncertainty, and you never know what tomorrow will bring for you. If you are the sole breadwinner of the family, in the back of your mind, you have thought about your family’s financial security in your absence. Securing your family with Term Life Insurance is an ultimate solution that ensures your family is financially protected in case of your unfortunate demise. A term plan can be purchased in both ways; offline and online. This article will discuss the features and differences between Online Term Plans and Offline Term Plans.

What is Term Insurance?

Term Insurance is the purest and most affordable form of life insurance that provides coverage for a certain period called ‘term.’ In case of the policyholder’s unfortunate demise, it provides financial protection to their family. The policyholder is not a beneficiary in this type of insurance because the sum assured is given to the nominee in case of the death of the policyholder.

A policyholder is required to pay a premium for a chosen term; failing to do so will result in a policy lapse. The three significant factors affecting the premium are the policyholder’s age, sum assured, and the policy term. In addition, the policyholder’s health and medical history are also taken into consideration while calculating the premium.

What is an Offline Term Insurance Plan?

It is a traditional way of buying a term plan. An Offline Term Insurance Plan is a term plan purchased by visiting the insurance company’s branch or at the insured’s home through an insurance agent. It involves the physical presence of a buyer and insurance agent or insurance company representative.

What is an Online Term Insurance Plan?

A term plan purchased online, through the insurance company’s official website or any other electronic mode, is called an Online Term Insurance Plan. Since it eliminates the need for a third-party and brick-and-mortar store, customer acquisition and buying process costs are significantly reduced. Due to the quick, easy and comfortable purchase process, term plans have recently gained immense popularity in India.

What are the differences between an Online Term Plan and Offline Term Plan?

The key differences between the Online Term Plans and Offline Term Plans are as follows:

1. Choosing the Right Plan:

Choosing the right term insurance plan online is easier than offline term plans. Many websites offer a thorough comparison of different term plans without any charges. However, it is recommended to visit the official websites of the insurers and check for the features and benefits as the information available on some financial websites might not be accurate and updated. In the case of an offline term plan, you will have to visit the branches of the insurers to get the required details for a proper comparison, which can be time-consuming and difficult. Furthermore, there is a chance that the insurance agent or representative might manipulate you to buy a term plan that might not be the best option for you.

2. Hassle to Purchase:

Since the offline term insurance plan is bought in a physical presence of an agent, you do not have to worry about whether you are correctly following the process. The agent or representative will guide you and clear all your doubts throughout the process. However, there are many incidents where the claims were rejected as the insurance agents had made errors while filling the insurance proposal form. Therefore, it is advisable to fill up the form on your own, and in case you do not understand any jargon or have any other doubts, get them cleared with the agent. In the case of an online term plan, you will have to be very careful while filling in the details and uploading the correct documents, as any error or mistake can lead to policy or claim rejection. However, insurers provide online assistance in case you have any difficulty filling out the application.

3. Privacy:

The online term plans offer greater privacy as your information is directly available to the insurance provider without any third-party interference. However, in the case of an offline term plan, an agent or representative can check your information and may misuse it for their benefit.

4. Time:

As we already discussed, the time required to select the right term plan is considerably lower in the case of an online purchase. Besides, the application process is also quick with online term plans. In case of an offline purchase, the physical proposal form is checked at the branch level, sent to the concerned department, verified, and then it is accepted/rejected, making it a very lengthy process. While an online policy is instantly delivered to the buyer’s registered email id, an offline policy can take 7 to 30 days to deliver, depending on the insurance company’s policy.

5. Premium:

Unlike an offline purchase of term insurance plan, the online term plans are cost-effective as there is no cost of branch set up, electricity bills, insurance agent’s commission, etc. Hence, online term plans generally have more affordable premiums. Apart from that, the insurance providers offer several discounts on the premiums from time to time, which can help you get the best deal.

6. Other Benefits:

Apart from the death benefit in an online term plan, a buyer can purchase extra benefits like disability cover, critical illness cover, etc., as add ons for a slightly extra premium. Whereas, in the case of an offline term plan, many insurers offer such benefits without an extra premium to attract customers.

7. Informed Decision:

A buyer can make an informed decision by comparing different policies online, thoroughly reading the terms and conditions, contacting customer service, and checking the actual customer reviews. However, in the case of an offline term plan purchase, a buyer is mostly dependent on the insurance agent or representative’s words.

8. Customer Service:

The insurance companies offer customer support to both online and offline term plan policyholders. However, offline buyers have an advantage as they can easily approach their agent for any queries, which they can forward to the customer support team.

9. Flexibility:

The online term plans offer greater flexibility as they can be purchased from the comfort of your home, and you get the policy delivered to your registered email id almost instantly. Many online term insurance plans do not require medical check-ups, but if it is required, you can choose the appointment slot at your convenience. However, in the case of an offline term insurance plan, you will also have to consider the insurance representative or agent’s schedule and convenience at every step.

10. Possibility of a Fraud:

While purchasing a term plan online, you will see all the features, benefits, terms and conditions, disclosures, a list of inclusions and exclusions, policy exemptions, etc., on the website, which you can explore any time. Hence, there is nothing hidden from you in online term plans. But, an insurance agent can hide specific terms for his/her benefit or misuse your personal information.

To Conclude:

As you might have realised, purchasing a Term Plan online has several benefits over an offline purchase. The online term plans are not only convenient but also more affordable. However, suppose you are not comfortable doing financial transactions online and prefer someone to be available just a call away. In that case, you should consider purchasing an offline term plan from an insurance agent as he/she will be with you and your family right from the selection of the plan until the claim settlement.

This article first appeared on PersonalFN here