There are a lot of talks these days about buying insurance online. While the younger generation really banks on the digital marketplace for all their needs, including their insurance needs, the older generations are still in the process of warming up to the idea of online insurance. There are some definite benefits you get when you buy term insurance online. One of them is that the plans are cheap. When it comes to term insurance, a form of life insurance that is already cheap, you get the plans literally at throw-away prices online! There are various reasons for this. But how beneficial is this offering and should you go for it? Read on to know more.
Reasons Why Online Term Insurance is Cheap
If you ask if term insurance online is cheap, the answer would be a very reassuring yes. The term life insurance plans available online are indeed less costly than their offline counterparts. The reasons behind this are:
- No Brokerage
The biggest reason for the price cut is that you save on the brokerage amount. The insurance companies directly sell the term life insurance plans online, without the involvement of any insurance agent. You are thus spared the brokerage cost which you otherwise would have had to pay your insurance agent. This is an advantage and a very handy way in which you make savings when buying your term insurance plan online.
- Lower Administrative Fee
When your insurer sells you a term life insurance plan offline, they have to set up an office for it. They have to pay rent, pay for electricity, pay the salaries of the employees, etc. This pushes up their expenditure and to make up for it, they charge you an administrative fee. However, when the term life plan is sold online, there is minimal human involvement as a lot of the work is done automatically and digitally. The insurance company, therefore, does not charge a high administrative fee and the overall cost if the term plan comes down.
- Less Documentation
The paperwork involved is negligible, as all the documents are stored online. This again is profitable for the insurer as they do not have to store files, print forms, etc. The cost-saving is transferred to the customers and so, as a customer, you end up paying less for your online term insurance plan.
- Lower Risk
The level of risk is lower for you as well as your insurance provider. You deal very safely as the transaction happens directly with the insurance provider. The insurer is also more assured because the profile of an online customer is stable. He or she is educated, takes care of his/her health and is seen as a favourable client. Acknowledging this fact, the insurer reduces the cost of the online term insurance plans.
- Option to Compare
And finally, you get the all-important option to compare the term life insurance plans. Term insurance comparison is very important as you get to save a lot of money when you compare. Comparing is nothing but looking at all the plans side by side to understand which is the best plan at the best rate. When you shop offline for term insurance, it is quite impossible for you to go over all the policy documents to see which is the best option. However, the job becomes extremely simple and easy to complete when you do it digitally.
These are the logical reasons that tell you why you pay less when you buy term life insurance online.
Drawbacks of Buying Term Insurance online
Sadly, there are some minor drawbacks that people face when buying term insurance online. They are:
- Not Everyone has Access
The biggest drawback of the online insurance plans is that you need a smart device or a personal computer to get it. Not everyone has access to such gadgets. People from lower socio-economic backgrounds cannot access the online insurance world. Similarly, older people who have the means but not the knowledge of gadgets, struggle with the online term insurance plans.
- No Assistance from Brokers
Insurance agents or brokers do charge a fee, but their assistance is of great use to some people. This happens especially when you do not have good knowledge of insurance. The agents explain the plans to you and help you choose the ideal cover. Also, the agents help you with renewals, claims, etc. When you buy term insurance online, you are left on your own and need to carry out all the tasks and take all the decisions by yourself.
- Lesser Clarity on the Cover
You can always call up the customer support team of your insurance provider and understand how the term plan works. But when you buy the plan offline, either your insurance agent or the insurance company’s executive will explain the plan and all its covers very thoroughly. This doesn't happen online.
While these are pertinent drawbacks, they are also problems you can workaround.
The Final Word
The internet has opened up a world full of opportunities for everyone. You should grab these opportunities and buy your term insurance plan online, the online term plans are really cheap and useful as well. You also get to choose your own policy and make an informed and unbiased choice when buying term insurance online. Thus, if you are looking to get term insurance, login, run a quick comparison and buy the best term insurance plan at an affordable rate.