How to Buy Term Insurance Policy Online

How to Buy Term Insurance Policy Online

The internet has made it possible to access a variety of previously inaccessible services. Financial services are one of the industries that have reaped the most benefits from the digital revolution. Online, one can invest in mutual funds or purchase an insurance policy. The demand for online insurance plans has increased significantly, which may aid in increasing insurance penetration in India. Because of its simple structure, purchasing a term insurance plan online is incredibly straightforward and convenient.

What Exactly is Term Insurance?

A term insurance plan is a straightforward agreement between an insurer and an insured in which the insurer commits to pay a predetermined sum to the insured's nominee in the case of the insured's death. The insurer is obligated to honour the agreement if the policyholder pays all premiums as per the schedule. Term insurance does not include an investment component, and no maturity money is paid at the end of the policy term. A term insurance policy simply ends when the policy term expires and the life insured survives.

Why Should You Buy Term Insurance Online?

There are several advantages of purchasing a term plan online. The key advantage is the policy's low cost. Online term policies are less expensive than traditional term insurance. An insurance company must engage advisors, dealers, or even its own marketing specialists to sell regular term insurance. In the case of offline term plans, the insurance agent charges a commission for his or her services, which is not charged in case you go for direct online purchase.

Furthermore, physical paperwork is greatly reduced, resulting in extra savings for the insurer. People nowadays tend to live a healthier lifestyle. A better lifestyle minimizes the likelihood of illnesses and hence the risk for the insurer, resulting in reduced term plan costs for online purchasers.

Another significant benefit of purchasing a term plan online is the resources accessible on the insurer's website. When purchasing term insurance offline, you must rely on the insurance agent or marketing specialist. People often select from a small number of alternatives presented to them. In the case of online term plans, you may perform extensive research and compare them to other plans. Insurance firms now provide online EMI, premium, and eligibility calculators, which aid in making an educated selection.

Steps to Take When Purchasing Term Insurance Online

Steps to Take When Purchasing Term Insurance Online

Your term insurance policy's sum assured should be sufficient to cover your family's financial commitments in your absence. Consider the following while determining the amount that will suffice :

  • Your current earnings
  • Count the number of financially dependent members in your household.
  • Existing liabilities such as mortgages, loans, and so on.
  • Funds necessary to maintain your family's present standard of living.
  • The amount that should be put aside each month for financial goals such as a child's education.
  • The inflation rates

Most financial gurus propose at least 15-20 times your current yearly income as a sum assured.

Choose Your Insurance Company

You must choose a reputable insurance provider before purchasing coverage. Here are a few things to keep in mind :

The insurer's claim settlement ratio is a fantastic approach to determine the company's reliability. Every year, the Insurance Regulatory and Development Authority of India (IRDAI) publishes the claim settlement ratio of each insurance firm. The chart depicts the number of claims settled by a policy provider in relation to the total number of claims filed in that year.

The insurer's solvency ratio can be used to evaluate their financial capacity to satisfy their customer obligations. Fiscal stability is indicated by a greater solvency ratio.

Instances of IRDAI norm breaches and market repute, such as grievance ratio, can further demonstrate a company's dependability.

Calculate the Premium

Online Term Insurance calculators can help you figure out how much you'll have to pay for your chosen sum assured. The premium should be within your budget.

Enter your information

Visit the website of the insurance provider you choose and input information such as your birth date, gender, smoking or drinking habits, monthly salary, and contact information.

Input the Sum Assured and Policy Tenure

As a general rule, choose a longer policy term if you are younger and a shorter policy term if you are middle-aged. If you are younger, your premium will be lower as well. As a result, it is best to begin your term plan as soon as possible.

Choose Suitable Riders

By investing a little more, you may strengthen your family's financial safety net. If you have a family history of critical illnesses such as heart attacks, renal problems, or cancer, you may supplement your term plan with a critical illness cover. You must pay a little extra fee with your premium in order to get a lump sum payment if you are diagnosed with a serious illness.

This can help your family cope with the high costs of good healthcare. You may also choose an additional death cover rider, which means that if you die in an accident, your family will get additional payouts in addition to your death benefit with an accident policy. This might assist them in covering the costs associated with the accident. Please note that riders are not mandatory and available at an additional cost.

Enter Your Medical Information

You will be required to provide information such as your height, weight, history of alcohol or cigarette use, medical issues (if any), hospitalization history, occupational dangers depending on the type of your employment, and other similar factors. Make sure you give all of your medical information to prevent having your beneficiary's claim invalidated in the future.

Read And Understand the Policy Terms and Conditions

It is critical to understand insurance exclusions (if any), such as death due to natural disasters, terrorist actions, or drug misuse. You will be sent to the payment gateway once you have agreed to the conditions.

Complete the Payment

You can pay with net banking or credit or debit cards. If your proposal is accepted, you will receive a soft copy of your policy through email. The physical copy will be mailed to you later.

To Summarize

Death is a devastating experience for the deceased's family. The death of a breadwinner adds to the agony of a financial crisis. Online price comparison and purchase of an appropriate term insurance plan can safeguard your family from future financial troubles.

  • A lump-sum payment to your nominee upon your death.
  • A portion of your money insured in the form of a lump sum followed by recurring monthly income for the beneficiary for a certain term: This is beneficial for achieving life objectives such as a child's marriage or further education.
  • Regular monthly income for a set period of time: This is handy if the nominee isn't used to dealing with enormous sums of money all at once.
  • Increasing monthly income over a set period of time: This is useful for combating the impacts of inflation and providing for growing living costs.

Disclaimer:

The article is meant to be general and informative in nature and should not be construed as solicitation material. Please read the related product brochures for exclusions, terms and conditions, warranties, etc. carefully before concluding a sale

Consult with your financial advisor before making any decisions on insurance purchase.

Tax benefits are as per the Income Tax Act, 1961, and are subject to any amendments made thereto from time to time.

Suggested Plans

Bharti AXA Life Guaranteed Income Pro

  • A Non-Linked, Non-Participating Individual Life Insurance Savings Plan
  • 4 Income options to choose
  • Guaranteed 10% Addition of Annualised Premium (as per the terms and conditions of the policy)
  • Get all your premiums back at the end of the payout period under Long Term Income and Deferred Income variants
  • Flexibility to choose premium payment term or policy term

Bharti AXA Life Super Series

  • A non-linked non-participating individual life insurance savings plan
  • Range of investment duration and returns
  • Guaranteed money back benefits (provided policy is in force and all due premiums have been paid)
  • Income tax benefits (as prevailing tax laws in India that are subject to changes)

Bharti AXA Life Grameen Jeevan Bima Yojana

  • Non-Linked Non-Participating Life Term Micro Insurance Plan
  • Flexibility to opt for two plan options: Pure Protection Plan Option, Protection with Return of Premium Option
  • Flexibility in Policy Term/Premium Payment Terms
  • No medical examination
  • Tax benefits

Frequently Asked Questions (FAQs)

What’s a claim settlement ratio?

The claim settlement ratio of a company refers to the percentage of the number of claims settled by the company out of the total claims made that year. You must check the claim settlement ratio of your insurance provider as it’s an indicator of its reliability and credibility.

What’s the best way to determine the right sum assured amount for a term insurance policy?

The best way to determine the right sum assured to cater to the demands of your loved ones in your absence is calculating twenty times of your annual income and adding a certain amount to account for inflation. This is a method that’s accepted by most financial experts.

What are riders?

Riders are essentially add-on covers on your base life insurance policy. These add-on benefits enhance the effectivity of your policy and make it much more useful. For example, opting for a critical illness rider on your life insurance policy allows you to ensure that in an unfortunate circumstance where you are unable to continue with your employment due to a critical illness, you and your loved ones have a financial safety net to help you lead a comfortable life. Riders are not mandatory and available at an additional cost.

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