To cover your self from unforeseen risks in future, buy term plans or pure insurance plans online as against those sold through regular channels. Term plans sold online are cheaper as insurers pass on the cost saved on distribution (agent’s commission) and are loaded with features.
Term plans sold online are 8-10 per cent cheaper than those sold through an insurance agent.
Most life insurance companies have begun offering term plans specially designed to be sold online. Many companies such as HDFC Life Insurance will begin offering online term plans soon.
Gaurav Rajput, director (marketing) Aviva India Insurance said, “Online plans are cheaper than the ones sold through regular channels because there is no intermediary between the buyer and seller, thus, saving on commission. Also, the marketing costs of the company and perceived risk of death are significantly lower with higher persistency (because they have opted for the product themselves).”
Term plan or pure insurance policies are increasingly becoming popular with increased awareness about the need for life insurance. Term plans do not have any investment components and maturity benefits. To push online sales, insurance companies are adding more benefits to make their online term plans more attractive.
Suresh Agarwal, executive vice-president, Kotak Mahindra Old Mutual Life Insurance said, “In our online plans, we offer two additional features – step up and step down options. Step up option guarantees additional cover at certain important stages in life at a cost in hassle free manner. One can increase the sum assured without having to undergo any further medical examination.”
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Various stages could be marriage, purchase of house in India, birth or legal adoption of a child. A step down plan is subject to lower amount of cover only if minimum amount of cover available in the chosen plan. On stepping down, premium is recalculated based on revised sum assured. This option is helpful since one’s responsibilities don’t remain the same throughout life.
Aegon Religare that introduced first online term plan in the market plans to overhaul its existing online term plan (called iTerm) with more features. “We will soon launch iTerm with more features,” said Yateesh Srivastava, CMO, Aegon Religare Life Insurance.
You can also enhance your life cover by adding riders to the covers by paying a small additional sum. Popular riders include critical illness and personal accident. Basic features of term plans, both sold online and offline, are similar and suicide is excluded.
However, riders may have their own set of exclusions. For example, ICICI Prudential Life insurance lists engaging in aerial flights (including parachuting and skydiving) other than fare paying passenger on a licensed passenger-carrying commercial aircraft as an exclusion in its accidental death benefit rider sold along with iProtect term plan.
Subrat Mohanty, senior vice-president (strategy and product), HDFC Life said, “We have kept exclusions at a minimum for the basic term plan. The one exclusion that we continue to carry is on suicidal deaths. We shall not be liable to pay if death occurs directly or indirectly on account of suicide within one year from inception date or issuance date, whichever is later. There are separate exclusions for riders if opted for.”
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