Should I buy my term insurance online or offline?
Everything today has become digital and the reasons are obvious - buying stuff online is quick, easy, convenient and you get a lot of discounts. It is possible to do almost everything and anything online - shopping, paying bills, ordering food. Even consulting the doctor.
But think about this. Would you really feel confident getting a diagnosis online, knowing that the doctor hasn’t physically seen or examined you? While we might want to avoid the trip for minor ailments - would you be okay getting major diagnoses, long-term treatments online?
The situation is very similar when you look to buy insurance too. Much like a long-term medical treatment, an insurance purchase too could have implications on you and your family’s financial health for your entire life. And before you decide which mode is right for you, you must compare both the options, weigh in the pros and cons and then pick the option that gives you the most peace of mind.
So, let’s get right into it and compare!
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Comparing buying term insurance Online Vs. Offline
How easy is it to find the right policy for yourself, and actually buy it? This is a factor that often impacts your overall experience while buying a term insurance plan. So, how do online and offline insurance purchases compare in terms of convenience?
Online purchase: Buying term insurance online is quick and simple - you can compare and purchase a plan within minutes, from the comfort of your home. Most insurance companies allow you to make your purchase through their online portal, and all your form submission, documentation, etc. happens through their portal itself.
Offline purchase: In the offline mode, you might either need to visit the branch office yourself, or work with a financial advisor to manage the policy purchase for you. The advisor will then visit the branch office - bring you the form to be filled. They will also gather the documentation at your end and submit them to the insurance company.
Cost and discounts
Term insurance is by far the cheapest and the most cost-effective way to secure your family, financially. But, even within this - there could be a difference in costs - mainly through discounts and special offers, based on where you purchase the policy. So, what differences should you expect between offline and online purchases?
Online purchase: When you purchase a policy online - through an aggregator or the insurer’s website, you’ll most likely get huge discounts on your premium amounts. This is actually one of the most popular USPs that online portals advertise while selling plans - and if it is very important for you to save money as you purchase term insurance - you can check out the many offers you get online.
Offline purchase: When you purchase the policy offline, however, you will not get any discounts or offers. You’ll pay the costs of premiums set by the company.
Sales & Advice: The Conflict of interest
The insurance business runs on commissions. Whether it is an online portal, an aggregator, or an offline agent - everyone earns a commission based on the sale they make. In fact - they get commissions not just when they make a sale, but every time you renew the policy too.
But - how do these commissions impact the quality of service you get? Do they make the service better like they’re supposed to, or worse?
Online purchase: On online platforms, you’re most likely interacting with a team that is trained only in selling - and is heavily incentivized for selling products that are better for the company (and not essentially for you). The person on the other end of the line has no reason to know you or your family. So, they are likely focused only on increasing their commissions, and not on building a relationship with you.
Further, once a purchase is made - your case moves from the ‘sales’ team to the ‘service’ team - so, you’ll likely never speak to the person who sold you your policy again.
Offline purchase: When you purchase a product offline through a financial advisor, you are interacting with the person who will be the face of the company, a representative - for all your needs. Sure, even their income depends on the commissions they make. But since you know them personally - it is a matter of reputation for them.
And a good advisor knows that building a reputation is more important than a slightly higher commission. So, they are more inclined to provide good advice and earn your goodwill. Further, they also know that when you trust them, you will recommend them to others in your family and friends - and that’s a sure-shot way of building their business.
Spamming and chasing
When it comes to selling the insurance policy, is there excessive calling, spam, and chasing during both online and offline purchases? Or are there any differences? Let’s find out.
Online purchase: One of the most frowned upon annoyances of the online insurance experience is that you keep getting calls over calls - as soon as you enter your number. In fact, most insurance companies don’t even generate a quote before getting a valid phone number (OTP checking). And once this happens, they will not stop calling you.
Portals as well, are notorious for excessive calling and spamming. If you block one number, they will call you from another. If you show your annoyance to one person, you’ll get a call from another. And this cycle can get tedious!
Offline purchase: As discussed above, the offline business relies heavily on goodwill, word-of-mouth publicity, and reputation building. Good financial advisors want to ensure their clients are happy - and that is their first priority.
However, it also sometimes happens that the financial advisor you work with, is someone you know personally - could be a family member or your mom/dad’s friend. If they turn out to be more persistent to sell, than you’d like - it might become uncomfortable, even awkward to block them off - as they belong to your personal circle.
We have outlined a few measures you could take to find a good financial advisor, towards the end of this article.
Remember, your family will have to go through the whole claim settlement process, not you. If anything goes wrong, you won’t be present with them to make things right, and hence, it’s very important that they have a good advisor by their side who’ll ensure that the claim is processed smoothly.
So, how do online and offline purchases compare in terms of helping your family at the time of claim settlement?
Online Purchase: Unfortunately, most of the claims process across insurance companies is still offline. Although some insurers offer online claims services - forms and documents will still be needed to submit to the branch office.
Things have changed slightly with Covid19 and the fear of paper transactions - but, in a majority of cases, your family will still need to interact with the branch office to get the claim processed. They will most likely not get any help from the online seller, who sold the policy in the first place.
Offline Purchase: As mentioned above, a good financial advisor will be on your side during purchase - and with your family during the claims phase. They can act as the single point of contact between the insurance company and your family - and follow up on their behalf to get the claim approved quickly.
Remember - the term insurance journey is a long one and can span many decades. And purchasing the policy is just the first of the many steps. While buying online may be easy, time-saving, and cheap, it is less likely that you’ll receive personalized guidance or assurance during and after policy purchase. Yes - you get a 5-10% rebate on the cost - but there are disadvantages that come along too.
On the other hand, a financial advisor cannot give you a discount but is more likely to be on your side to find a good fit - as well as stay in touch with you and your family throughout the process, from purchase to claim. It is not to say that any financial advisor will guarantee great service. Only buying from committed financial advisors with an established track record for service, claims assistance should be preferred.
Whether you buy your term insurance plan online or offline, you must be aware that they come with their own pros and cons. Only after assessing all these factors, can you actually make a well-informed decision on where you buy the policy from!
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! Check out the Beshak Insurance Forum, now!
How do you find the advisor?
If you face any issues during or after buying the policy, you’ll need a knowledgeable person on your side, to help you make sense of your situation and solve them quickly. Whether online or offline - you’ll need this representative who will help you navigate the complex world of insurance. But, how do you find your advisor - in online purchases and offline?
Online purchase: The seller or advisor that you’ll find online is essentially appointed by the system. They’re picked by the computer - meaning the assignment is rather random. So, it largely depends on luck- whether you get the right, wrong, good, or bad advice. Further - once your purchase is made, this person will not own the rest of the experience. Your case moves to the service team, you’ll be assigned another person, randomly again. Again, you’ve to be lucky to find a good person to assist you.
In fact, every time you call the toll-free, there might be a different person handling your case. And every single time - you’ll need to be lucky to get a good advisor. The whole experience relies on the system, the process being seamless.
Offline purchase: In an offline purchase, however, you pick the advisor. You take references from friends, or family, or from social media, who have already used their services - and base your decision on this. Of course, here too - there is an element of luck you’ll base your decision on. But once you find a good advisor who you can depend on, in the long-term - they will not only be with you during the purchase phase but also help your family out during the claim phase.
How to find a financial advisor you can trust?
This also means that the responsibility of doing due diligence lies with you. Remember, insurance is a promise to deliver in the future, you need someone knowledgeable, experienced to handhold you when the time comes. You have to make sure you take the proper references and find a good advisor to help you in the long term. In fact, we would say that you should spend as much time in finding the right advisor, as you would to find the right plan. Because, it is just as important, if not more!
Here are few tests that could help you identify a good, long term financial advisor:
- They will think about protection/risk first, and investments later.
- They will understand your needs well, before recommending solutions.
- They will recommend solutions (in the form of products), not simply share brochures, PDFs, or material with you immediately in the first meeting.
- They will have a track record of excellent service, beyond sales.
- They will own the experience and will be known for fighting it out with insurers to ensure that you get a good experience.
Key things to look at if you are forced to buy online:
- Ensure you do a detailed study before you sign up. Read the policy wording document, read blogs, ask questions on forums, like the Beshak Insurance Forum. Understand the benefits, limits, exclusions well.
- Always fill the proposal form yourself - do not depend on any sales representative. From our experience, we are sure that they’ll miss out on important details - which you’ll have to deal with later.
- Check the premium breakup before you make the payment.
- Ensure you track the case diligently until the policy document is issued.
- Check the policy document - to see if it matches what you had paid for. You can return a policy within 30 days of receipt if bought online.
- Ensure that you have shared all details about the policy with your family.
- You can compare and purchase a term plan online within minutes, from the comfort of your home, as opposed to buying offline where it might be a little time consuming.
- Online purchases often offer discounts on the premium, which might not be available when you buy through an advisor.
- Whether you’re buying online or offline, the sale will be driven by commissions. However, an advisor needs to build their reputation - and hence, will be less likely to sell you a bad product, just for the sake of a commission.
- Most term insurance claims processes today are offline. This means that although you’ll buy the plan and pay premiums online - your family will need to get in touch with the branch office to get their claim amount. Having a financial advisor to guide them will help smoothen this process and give them a better claims experience.
- Whether or not you get a good and knowledgeable advisor online depends largely on your luck as the system will appoint them. Offline however, you can do the due diligence and find a financial advisor who is right for you.
- You should spend enough time and effort to find a good advisor for your family - as it is as important as finding the perfect term insurance plan.
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