• Introduction
• Insurance Agents
• Banks
• Online aggregators such as Policybazaar or InsuranceDekho or Coverfox
• Insurance company websites
• Let's Summarise!
• How should you decide where to buy?

Let’s say you’re thinking of buying a pair of good quality jeans for yourself. Thanks to the digital revolution, going to the mall for shopping is not your only option. You can simply browse hundreds of options on online shopping platforms such as Amazon or Myntra - and buy something instantly. The product will be delivered straight to your doorstep in a couple of days. 

While this is super convenient, we all know - there’s a slight risk while buying clothes online. They might not fit you, the design might be different from what’s shown in the picture etc. So - there’s a decision for you to make.  

Similarly, when you want to buy a term insurance plan - you will realise that you have a volley of choices as to where and how you can buy the insurance policy from. Agents to online insurance aggregators (Policybazaar, Coverfox, etc.) - where each option comes with its own advantages and disadvantages. 

In fact, we recently received a question on our forum, from Sanket Pusalkar that when you buy a policy online, is it better to buy policies from aggregator platforms like Policybazaar or from the insurer directly. 

And, we thought we should do a thorough comparison of all the pros and cons - of not just these two options, BUT ALL THE OPTIONS AVAILABLE as you set out to buy a term insurance plan.

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So, here we go! 

Here’s a quick look at each of the options you’ll have and things to consider so you know exactly what you’re signing up for. 

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Buying through agents is the most traditional way of purchasing insurance - and most of our parents and grandparents have done just that. While you might hear your mum calling them all ‘LIC agents’ - insurance agents can represent any (or multiple) of the insurance companies. 

What’s good? 

• There is an amount of comfort buying insurance from people we know and agents provide that comfort. 
• The agent can turn into a friend and can take us through the latest insurance products with exciting benefits. 
• If they live close to you, in your neighborhood or they are friends or family, then they have a reputation to live up to. This considerably reduces the chance of them blatantly cheating you. 
• They may also be acquainted with multiple family members and so, they can understand your requirements and budget. 
• Some agents can ensure excellent service and help during the claim process. Your nominee will have able support at the time of claims locally, and not have to run around for claims or paper work. 

The flipside 

• They make commissions as a % of the premium you pay, and hence might often nudge you towards high premium or high commission products. 
• Many of them might not be very well versed with low-ticket (but important) products that might actually benefit you like Personal Accident insurance or Home Insurance. 
• A very few insurance agents would have a technology interface in place to help you easily compare and decide on a product. 
• Further, when you go through agents, you will often have to pay the full price of the plan without any possibility of discounts. 
• Finally, if your agent leaves the agency, shifts to another place, retire, etc. - you may have to deal with the nitty-gritties on your own. You obviously don't wish to run from pillar to post deal directly with the insurer’s infrastructure, especially in your old age. Always try to deal with an agent who is not on his own, has processes, backup resources etc. when he is not around to give you support. 

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Banks have now become ‘insurance supermarkets’ where they sell several financial products including term insurance. 

What’s good?

• You don’t have to deal with multiple people, repeatedly provide documents when you deal through your existing banking relationship. You in fact end up solidifying the relationship with the branch and the officers there, which can help you overall in the long run. 
• Banks offer special offers on  term insurance plans to their account holders, and the process could be simple and time-saving. 
• Several banks may also develop suave tech platforms and portals to make the purchase process easy and accessible. 
• Some others might get you exclusive discounts or promotional features, over and above what the insurer themselves offer. 

The flipside 

• They have fierce targets, depend on commissions on sales, and hence might proactively sell you only high-margin products. We have had so many instances with our team where only high-margin, not customer-centric products were pushed by relationship managers at banks. 
• You might not have a wide variety of products to choose from at a bank. They will mostly have specific tie-ups and your choices might be limited. 
• You won't be able to make a comparison of plans, customisation options, etc. when you choose to take a bank policy. 
• Further, the bank will only facilitate your plan - they usually will not provide service or claims assistance - for which you’ll need to connect directly with the insurance company. . 

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In all, there are around 20 online aggregators across insurance products in the country. 

What’s good? 

• Insurance aggregators are tech-savvy and allow you to go through multiple insurance plans in one go. You can easily compare plans sold by different insurance providers. 
• They may also give you free-of-cost tools and advice to help you make a well-informed decision (though this comparison and advice is riddled with conflict-of-interest and other challenges). 
• They can also get you exclusive discounts, special services and offers for certain products. 
• Further, since you’re dealing with an organization - not an individual - you will have institutional support in the form of a call-center or email support throughout your purchase journey. 

The flipside

• While they position themselves as advisors with your best interest in mind, their bottom-line is finally supported only by insurance companies. So, similar to agents and banks, aggregators too have a conflict-of-interest and a clear incentive to push high-ticket sales. 
• Secondly, there is no personal connection. Since the transaction is managed through a call-center or an online process, you are always speaking to a different person after you make the payment - who depends on a trail of notes and discussions to help you make decisions. 
• Sales process disconnected from the proposal delivery and the claims process. When you buy a product from an aggregator, they’re only involved until they process the sale. The post-sales experience is shared with  the insurance company who might have a very different approach to customer service. Further, most aggregators are not well equipped to  get involved in the claims process. So, you are left with no one to seek such support from. 
• One of the biggest annoyances our users have expressed is that most aggregators and comparison websites don’t even display a list of products without taking a phone number. As soon as they give their number, they are bombarded with never-ending calls from different call-centers, executives and phone numbers. This can get very frustrating. 

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Finally - you also have the option to buy your policy directly from the insurer’s website. 

What’s good?

• You may get discounts/benefits/offers when you purchase insurance directly from the insurer's website or portal. These offers may not be available elsewhere. 
• Several insurers have created good tech platforms like websites, mobile applications, and the likes - that help you browse products and purchase them online.
• You also have the benefit of interacting with an organization here, so even in case the person who introduces a policy to you retires/ moves on - there is a system to support you. 

The flipside 

You cannot compare products across different companies automatically. You’ll have to manually scan, make note and then compare - and that’s not an effective process at all. 

Further, not every insurance company has their technology infrastructure designed for customer service like insurance aggregators. You might face many glitches after making payments. 

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Here’s a quick snapshot of the experience, pros and cons you might expect while buying term insurance across different intermediaries.

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Choosing the place to insurance from depends on your needs and requirements. Just like every coin has two sides, each of these options, too has its pros and cons, which you should now be aware of after reading this article. 

All we would recommend is that before you jump on to deciding where to buy from you should use our recently launched - Beshak⭐Ratings platform to carefully compare all features, benefits, advantages and disadvantages to zero in, on the most suitable product for you. 

Which of these outlets do you prefer? And why? Let us know in the comments below.

Got a question you’d like to get clarified? 

You can post it on the Beshak Insurance Forum - and get answers from vetted experts, for free!