Michel Bastos
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Why Online and Offline Term Plans Differ on Premiums

One of the important aspects of financial planning is to purchase a robust insurance cover for your family to keep them protected against the uncertainties of life. And, one of the most important insurance plans you must buy to secure your family’s financial future is the term policy.

A term policy is a type of life insurance policy that remains active for a specific number of years. Under this policy, the insurer pays the death benefit amount to the family member, i.e., the appointed nominee in the event of your unfortunate demise during the policy period.

Today, with the advent of online services, buying a term plan is easier than ever before. And if you compare the policy prices, you would know that the online term plans are much cheaper than the offline plans. If you wonder why? Here are a few reasons.

Today, many people prefer buying a term insurance policy online mainly because it is easy. You can easily purchase it from the comfort of your home or office and at any time of the day as per your convenience. And as the number of people buying online is high, the insurance companies offer attractive offers for online buyers. At times, you may notice that the plans that your offline agents suggest is much cheaper when you buy online. This is mainly because of reduce business cost when the plans are sold online.

One of the most significant drawbacks of buying an insurance policy offline is that it involves both the insurance buyer and the company to deal with a lot of complex paperwork. The insurer must physically verify the documents you submit and maintain it in files and store them safely. This not only takes space but also take a lot of manual effort.

On the other hand, when you buy insurance online, the documentation process is simple and quick. You must simply upload the relevant documents on the insurer’s portal. And, the insurance companies can maintain the online copies on their system. This significantly reduces operational cost and the hassles of maintaining the thick bundles of papers. The insurance companies pass the savings to the customers and therefore the online plans are much more affordable than the offline ones.

When you purchase a term insurance policy offline through your insurance advisor or an insurance agent, they may try to sell you the policy that provides them maximum commission. But, the policy may not be right choice for you. Not to mention, you must pay the agents fees for their services. This will inevitably increase your overall insurance cost.

On the contrary, when you buy a policy online, you directly deal with the insurance company; there is no third-party involved and there are no middlemen fees. Thus, you can save a significant account on the premiums and get the policy at an affordable price.

The underwriting process allows the insurance companies to assess the risk of offering the coverage. When you buy the policy offline, the process can take a long time. But, in the online mode, the process can be completed within a couple of days, even if you must submit a few additional documents or undergo a medical test. Thus, you save your hard-earned money on the premium payments.

Thus, it is evident that low operational cost, zero involvement of middlemen and efficient documentation, which are the highlights of online insurance buying helps you gets the policy at a cheaper rate than offline purchase.

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