29 Mar, 2021 | Term Life Insurance

Where can I buy insurance from? Policy Bazaar vs Agents vs Insurance Brands | Beshak

Team Beshak
By Team Beshak
We breathe insurance :)
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Introduction

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 decide to buy a term insurance plan for yourself - you will be faced with several choices as to where and how you can buy the insurance policy from. From agents who are family friends, to online aggregators like Policybazaar or Coverfox - who offer exciting offers and discounts - each of these options comes with different pros and cons. 

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. 

Prefer watching a video instead? 

Insurance Agents

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. 
  • Usually, the agent becomes a family friend over time with a personal touch, and introduces us to interesting, new products across insurance companies as they come. 
  • 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. 
  • Since they know many members across your family - they will have a good picture of your needs, budgets and preferences. 
  • A few of them may also provide exemplary assistance at the time of claims.  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. 
  • Lastly, if the insurance agent decides to give up his agency or move to a different town or retire - and he does not have an office that manages the policies and renewals, you might be all on your own. You don’t want to run around and 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, infrastructure, backup resources etc. when he is not around to support you. 

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Banks

Shopping at a supermarket is very convenient as we get a variety of products under one roof. Likewise, banks have now become 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. 
  • Some banks invest into technology platforms to make the purchase process easy for you. 
  • 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. 
  • With bank policies, you don’t have the opportunity to compare all products, customisations 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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Online aggregators such as Policybazaar or InsuranceDekho or Coverfox

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

What’s good? 

  • Aggregators are built as technology solutions, offering easy access to insurance plans across companies, in one shot. 
  • They allow you to compare products across insurance companies and offer free advice to help you make a 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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Insurance company websites

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

What’s good?

  • When you buy directly on the insurance company’s website, they might offer you some benefits and discounts which aren’t available anywhere else. 
  • Some insurance companies have built decent technology platforms - websites and mobile apps - to help you go through product details and make a purchase online, without ever having to visit their branch office. 
  • 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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Let’s summarise!

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

 

Agents

Banks

Online Aggregators

Insurance Companies

All Products under one roof

Yes

No

Yes

No

Tech Platform

Yes

Maybe

Yes

Maybe

Special benefits

No

No

Possible

Yes

Personal credibility

Yes

No

No

No

Local Claims Support

Yes

No

No

Yes

Institutional Support

No

No

Yes

Yes

Personal connect

Yes

No

No

No

Premium discount

No

Possible

Possible

Possible

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How should you decide where to buy?

Choosing the right outlet really comes down to a matter of personal preference and choice. 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! 

Key takeaways
  • There are pros and cons associated with every platform that you can buy your term insurance policy from.
  • You can choose from an agent, insurer's website, online aggregator or a bank to purchase your policy from
  • In the end, where you buy from really comes down to a matter of your preferences and priorities
  • Regardless of where you choose to buy your policy, ensure that you check out the Beshak⭐Ratings platform, to objectively compare and identify the right plan for you and your family. 
Team Beshak
Written by,
Team Beshak, We breathe insurance :)

We are a group of young members of the Beshak community. We come together to brainstorm, write relevant and useful content for people (just like us) who want to figure insurance on their own. If you too want to share inputs/write for us - send us a "hey" to info@beshak.org

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5 Comments
01 Jan, 2022
by: Abhishank Shrivastava

Hi team, thank you so much for the prompt and detailed response. I agree with everything you mentioned - majorly that PBs' new initiatives have no proven track record yet. And If I see an issue with them, I will be more than happy to switch/port/take another policy through Service First Advisors. However, the scale argument is imperative for all the 'service first' advisors as well right? Everyone wants to expand their business and, eventually, these advisory firms will also grow to a level where the personalization might go down and tech/AI/generic structures will take their place. Since I am thinking of long-term insurance benefits, won't the templated scale apply a few years from now in their case too? (kinda like a business survival thing to do in my opinion) I also believe that insurance is completely word of mouth based because of the claim experience, and because of its yearly renewal situation- so I would assume that PB's leadership, as a listed giant in the space, would also make sure they provide a wholesome service (which is evident from the initiatives they have rolled out, which is yet to be proven). I know I am no expert, and I massively respect Beshak and its team of experts - but still wanted to share my thoughts and get them validated/invalidated through Beshak's experts.

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01 Jan, 2022
by: Team Beshak

You are not wrong. No one is. In fact, your point is very valid. What we have seen is that these advisors usually do not want to to scale beyond a point where their services are not personalized. They are very service conscious. We have seen good advisors not following up with customers beyond a point, because they don't want to be perceived as salesmen. The focus is to become a professional, and serve a set of clients personally. Do great work for them, and make a living. The sad part of today's post sales insurance experience is that many a thing is broken, especially claims where a specialised expert can make a difference by fighting from your side - we have seen that usually missing in a large factory like setup because their risk of losing reputation with one client is not so much. Just search for any aggregator on social media portals, and you will know what we are talking about. But we get your perspective too. Nothing is wrong or right, as far as you are clear and conscious about your decisions.



01 Jan, 2022
by: Abhishank Shrivastava

Hi team, thank you for sharing this wonderful piece of article. However, I recently learned that even Policy Bazaar allots a relationship manager, gives a 30 min guarantee certificate, and in major cities they also provide guarantee of someone physically present in the hospital to help with cashless/claims within 30 mins. So, maybe apart from the fact that the individual might not be personally known to us, they provide everything else possible with some guarantee through certificates (which might mean possibility of legal action if they don't comply). With all of this, isn't PB better than any agent or advisory platform ? Or did I miss something important here ?

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01 Jan, 2022
by: Team Beshak

Hello Abhishank, in our previous roles we have worked for organizations where we built such services. While the intentions could be great, the problem in our opinion is such services are very impersonal and templated "at scale". There are field staff employed by companies on ground - not comparable with personalized services offered by many individual "service first" advisors who are full time self-employed experienced professionals. In our experience, these professionals have a lot to lose, in comparison to relationship managers employed by large establishment. The personalization cannot be compared. Also, the fact remains that these are new propositions which haven't been tested. Only when there is enough data/feedback around their effectiveness is when we will be able to comment. On the other hand the services of a service-first self employed professional advisor have a track record, have many personal testimonials. These are founders of small companies (many of them qualified as CFPs, CFAs, CAs) that intervene personally when things go wrong. Our current view, in absence of enough feedback (for PBs new service), is therefore that one should buy from a individual advisor or his/her firm to assure of personalized service especially when things go wrong, over templatized services run by a factory-type call centre comprising of varied representatives, that you don't choose. You need to be lucky to get a good rep through that model. Of course, these are our views. We are super bullish about individual advisors over anyone today - which is why we created multiple services where we introduce people to such advisors. Let us know if this answer helped.



26 Sep, 2021
by: pavan

Exhaustive article.

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30 Apr, 2021
by: sanket pusalkar

Hi Team, Thank you for comming up with such a detailed article on my submission earlier. This was unexpected and is good to know that your team is actively involved in the queries and its best possible resolution.

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12 Apr, 2021
by: Shravan Kumar

Great article once again from beshak.org

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