So, let’s understand the modes of buying term insurance and the factors that need to be considered before the purchase.
What is a term insurance plan, and how does it work?
A term insurance plan is a life insurance plan which is protection-oriented and it aims to cover the risk of demise during the policy tenure and provide financial assistance. The term plan is a simple life insurance plan which offers financial protection against the risk of death during the policy term. If the life assured passes away during the chosen policy term, a death benefit is paid.
Most term plans usually do not offer any maturity benefit. In other words, if the life assured survives the policy term and the plan matures, no benefit is payable. However, suppose you have chosen the return of the premium term plan or the return of the premium option under the term plan. In that case, the premiums paid over the policy term are refunded on maturity.
Steps to buy a term plan online
You can buy a term plan online in some simple steps and right from the comfort of your home or even on the go. The common steps to buy the term plan online are as follows –
● Visit the insurer’s website.
Go to the official website of the insurance company and check the list of term plans which are available to buy online.
● Compare and choose a suitable plan.
From the available list, compare the term plans based on their coverage features, sum assured, premium, and other details. Choose a plan that matches your coverage needs and proceed to buy it online.
● Choose the plan details.
After shortlisting the plan, choose the coverage details like the sum assured, policy term, premium payment term and frequency, optional riders, etc. The premium will be calculated based on the plan details that you choose and other risk factors.
● Fill out the online proposal form.
Fill out the online proposal form stating your personal, medical and financial details like name, age, occupation, income, medical history, lifestyle habits (smoking, alcohol consumption, etc.) and other required information. This information is essential for underwriting the policy and also affects premium calculation.
● Upload the relevant documents.
After the proposal form is filled up, you will have to submit the required documents to buy the policy online. Some of the common documents include your identity proof, age proof, address proof, income proof (in some cases), etc. You can scan and upload these documents online or submit them offline using the proposal form.
● Pay the premium online.
After the documentation is complete, you have to pay the premiums online. Premium is required to be paid only after the insurer communicates the decision of acceptance of the proposal. Risk Cover shall commence only after receipt of the premium. No premium deposit/ proposal deposit is required to be paid to the insurer along with the proposal form except in case of policies issued based on a declaration of good health where risk cover commences immediately on receipt of premium. There should not be scope for either short or excess collection of premium.
The insurance company will ensure that explicit consent is obtained from you for deduction of amount towards premium payment from bank account.
● Undergo a medical check-up (if needed)
In some cases, the insurance company might ask you to undergo a pre-entrance health check-up before the policy is issued. Schedule and undergo the medical check-up to complete the application process.
After the steps are done, the insurance company will underwrite your policy and issue it if everything is found satisfactory.
Documents required to buy term insurance online
Some of the common documents required to buy a term insurance plan online are as follows –
- Identity proof like an Aadhaar Card, passport, PAN Card, voter’s ID card, driving license, etc.
- Age proof, such as birth certificate, Aadhaar card, PAN Card, voter’s ID card, etc.
- Address proof like an Aadhaar card, passport, driving license, rent agreement, property sale deed, etc.
- Income proof (in some cases) like salary slip, form 16, bank statement, financial statements of the business, income tax return of the past years, etc.
- Any other document required by the insurance company
Benefits of buying a term plan online
Some of the benefits of buying a term insurance plan online are as follows1 –
● Better choices
When you buy term insurance online, you have the facility to choose which plan suits you the best and matches your coverage needs. You have a range of term plans to choose from which allows you the flexibility and the facility to find the right plan.
● Affordable premiums
Online term plans usually have lower premiums compared to offline ones because the insurance company has reduced administrative costs when selling the policy through the online mode. The benefit of reduced costs trickles down to the policyholders who can enjoy lower premiums.
● Convenience
Buying term insurance online is convenient, too. You can buy the policy from any place and at any time in a few clicks. There’s no need to wait for the right time to visit the branch office or make an effort to physically visit the office to buy the plan. Just use the insurance company's website or mobile application and buy the plan easily with a few clicks.
● Transparency
You can check the terms and conditions, features, and benefits of the term insurance plan when you buy online. As in offline mode this also gives you complete information about your purchase, allowing you to avoid mis-selling and buy the right plan.
How do you buy term plans offline?
You can buy term plans offline through the branch office of an insurance company. The process is as follows –
● Visit the insurer’s office
Locate the nearest branch office of the insurance company from whom you want to buy the term insurance policy. Visit the office during working hours to buy the policy.
● Find and compare the available options.
At the office, you can contact an insurance executive and find the available term plans. Ask the executive to explain the features and benefits of term insurance plan so that you can find the right policy that matches your needs.
● Fill out the proposal form.
Once you have shortlisted the policy, get a physical proposal form from the office. Fill out the proposal form stating all your relevant details like age, address, name, occupation, income, medical history, etc.
● Submit your documents
After filling out the proposal form, submit the documents required to buy the term plan. Some of the common documents include age proof, identity proof, address proof, income proof, etc.
● Pay the premium
You will have to pay the term insurance premium to the insurance company when submitting the proposal to buy the policy. You can pay the premium by cash (up to specified limits), cheque, demand draft or any online payment mode accepted by the insurance company.
● Undergo a medical check-up (if needed)
The insurance company might ask you to undergo a health check-up before it issues the policy. You will have to schedule the check-up and undertake it. Based on the reports of the health examination and other risk factors, the insurance company will underwrite your policy and issue it if everything is found satisfactory.
Conclusion
Buy a term insurance policy for financial protection and security. Know how to buy term plan online and offline and choose a suitable mode. Keep the documents handy for quicker processing of the policy. Follow all the steps and disclose all your information to the insurance company so that you do not breach the principle of utmost good faith and the policy is underwritten with all the necessary facts.
Frequently Asked Questions:
1. Should I buy term insurance online or offline?
You can choose to buy the term insurance policy in either mode depending on your suitability and convenience. That being said, buying online plan can be quick and convenient.
2. How do you buy term plans offline?
To buy the term plan offline, you can visit the nearest branch of the insurance company, compare and choose a suitable term insurance policy, fill out the proposal form, submit the relevant documents and pay term insurance premium. The insurance company might arrange for a medical check-up before issuing the policy.
3. What are the payment options for buying term insurance online?
Different digital payment modes are available for buying term insurance online. Some of them include credit cards, debit cards, UPI, net banking, mobile wallets, etc. Check with the insurance company on the modes offered and choose a suitable mode to pay the premium online.
4. How do you choose the right term plan?
The choice of the right term plan depends on your financial needs, coverage requirements, number of dependents, affordability of the premium, existing assets and liabilities. You can use the online term insurance calculator to find a sum assured that will be suitable for your financial needs.
5. What are the most relevant things to keep in mind at the time of buying term insurance online?
When buying a term insurance online, here are some things that you can keep in mind –
- Choose a reputed insurance company so that you can get a secure website or mobile app to buy the policy without the threat of cyber-crimes.
- You can check the solvency and claim settlement ratio of the Insurer.
- Compare and choose a suitable term plan that matches your financial needs
- Check the available premium payment modes and choose a mode that suits you
- Ensure that the coverage is optimal to take care of your financial needs. If required, you can use the online term insurance calculator to find the right sum assured for your term plan.
Reference
BJAZ-WEB-EC-11483/24
An ISO 9001:2015 
