Term Insurance is Best – Online is the Most Convenient Way to Buy Term Insurance

How many of you have thought of buying term insurance and were told to opt for money back policies? Well, in spite of all this misguidance, some of you might have strongly decided to take term life insurance. But, how many of you are still chasing the insurance agents to fill the form, to get the policy activated and to know the exact details of monthly premiums? Sadly, many hands may raise for these questions.

Have you ever thought why these insurance agents have to misguide you regarding the term insurance policy? And why the same insurance agents who annoy you continuously to buy insurance policies, suddenly disappear the moment you get one?

This article gives you the reasons for their misguidance and the best way to purchase term insurance.

Term insurance is the best life insurance!

Term life insurance is the best financial product that provides large insurance cover at lowest cost. It is a pure protection policy, where the bread winner of a family can protect his family’s financial needs. Term life insurance provides income replacement, thus, allowing dependants live a financially comfortable life.

Term insurance offers maximum protection at low priced premiums compared to other life insurance options. For a 25 year old, the premium rates are around Rs 150-200 per month for coverage of Rs 20 lakhs. Even for someone considering a life insurance at 35 years, the premium rate is only Rs 200-250 per month.

You can get your policy arranged either through an agent or through online. However, purchasing term life insurance through an agent is not sensible compared to online purchase.

Agents are not interested in selling term insurance
Insurance agents show least interest in selling term insurance. All they want is to make a living with decent income, no matter what kind of insurance they sell to you.

  • Less incentives/commissions for term insurance: Agents get small incentive structures or commissions by selling term insurance. If you opt for Rs 10 lakh coverage at a premium of Rs 2,000 per year, the agent gets 2% commission on premium amount, i.e., Rs 40 per year, with which he can’t even pay his petrol costs.
  • Recommend customers to buy cash back policies: Products like ULIPS, endowment policies, money back policies, fetch good premiums for agents; hence, they often entice you with them. By selling a Rs 10 lakh money back insurance policy, which needs you to pay Rs 40,000 per year as a premium, the agent gets commission of Rs 16,000 (40% of 40,000), Rs 3,000 ( 7.5% of 40,000) and Rs 2,000 (5% of 40,000) in 1st, 2nd and 3rd years respectively.
  • Mis-sell insurance products: Greedy over premiums, many agents sell you the most unsuitable insurance policy. Only after that, does your life become a financial tragedy – you may get into financial hardships and may not be able to pay those huge premiums every month. Further, you may face the risk of being under-insured! (Hybrid life insurance products can lead to the risk of being under-insured!)

Online purchase is more convenient
Getting term insurance is not your job. You have a real job and a lot of things to do outside work – do not waste time chasing insurance agents who are not interested in signing up term insurance policies. Go online to purchase the policy.

  • Buying term insurance online is a hassle free and easy – saves time and requires minimum paperwork
  • No involvement of insurance agents – saves commissions and distribution costs
  • No need to follow up with the insurance agent to get form, seek guidance, etc.
  • Option to evaluate alternatives directly without meeting several insurance agents
  • You can find many options from different companies with different quotes at competitive prices online, just by providing your details like, age, annual income, profession, etc.
  • The comparison service through online sites is free to use, clear, crisp and user-friendly
  • Avoids misguiding by insurance agents
  • Can get factual information

Here is list of few companies that offer online term insurance policies – Aegon Religare, AVIVA, Bajaj Allianz, Bharati AXA, Future Generali, Kotak, HDFC Life, ICICI prudential, IDBI Federal, Metlife and Reliance.

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1 comment on “Term Insurance is Best – Online is the Most Convenient Way to Buy Term Insurance”

  1. A helpful article. Could you also include what ‘Term Insurance’ is all about and what it covers?