Buying term insurance online? Here’s what you should keep in mind.
Term insurance is relatively young; it was only introduced in the year 2009. A little over a decade later, it’s fast becoming a popular choice among first-time insurance buyers. The reason?
Term insurance is affordable, easily available, and offers a high life cover. Plus, it’s available online too!
Most top insurers today offer the option to buy term insurance plans on their websites. This is a very convenient solution, especially given how the pandemic has reinforced the need for contactless purchases. So, if you’re planning to buy term insurance today, online is the way to go!
But before you make your purchase, there are some important things you need to keep in mind. Check them out below.
Choose the right amount of cover
This is one of the first things you need to keep in mind when you’re buying term insurance online. The amount of cover that you choose needs to be enough to financially protect your family, and at the same time, it also needs to be affordable. Fortunately, when compared with other kinds of life insurance, term insurance gives you a significantly high cover for a relatively low premium.
You also need to factor in a number of other considerations before you determine the right amount of life cover. This includes:
- Your age at the time of policy purchase
- Any financial responsibilities you may have at the moment
- Any financial requirements that may crop up in the future
- The cost of your family’s basic expenses
- Any loans or other financial liabilities in your name
- The effect of inflation
Pick a reputable insurance provider
The insurance service provider that you pick matters a great deal. Ideally, you need to opt for an insurer who has a trusted reputation that you can rely on. The easiest way to check if an insurance provider is trustworthy and user-friendly is to take a look at what their customers say about them.
Check out any reviews that people may have left on the insurer’s site or elsewhere. Get to know the insurer’s history. And above all, check the company’s solvency margin. It is a measure of a company’s cash flow and its ability to pay any liabilities, including claims. The IRDAI recommends that insurers have a solvency margin of at least 150%. But broadly speaking, the higher it is, the better.
The Claim Settlement Ratio (CSR) is important
The Claim Settlement Ratio is another key number you should look at before buying a term insurance plan online. You can easily find this information on the website of the insurance provider you are considering. The CSR is simply the ratio of the claims an insurer receives, to the claims they settle.
Naturally, the higher this number, the better it is, because it indicates a greater probability of your claims - or your family’s claims - being settled. Aditya Birla Life Insurance has a Claim Settlement Ratio of 97.54%, as of FY20. And our average turn-around time for claim settlement is just 2.4 days from the receipt of all requirements.
What does this mean for you? Easier and faster claim settlement!
Ensure your research is thorough
One of the upsides of buying term insurance online is that you get to perform thorough research on the various aspects that matter. As you’ve seen above, getting to your insurer’s CSR, solvency margin, and overall reputability is one key area to research. But even beyond this, there’s a lot more you can - and need to - look into.
Once you’ve picked an insurer, compare the various plans they offer and see how the features and costs match up. You need to buy a term plan that you can afford. However, you also need to ensure that it meets your family’s financial needs. To strike the right balance, you’ll need to compare the different plans available. The good news is that there are many online comparison tools that you can use for this purpose - free of charge!
Submit the correct paperwork
When you buy term insurance online, everything happens digitally. Your application, your paperwork and eventually, the policy issuance too. So, before you submit the necessary KYC documents and other required paperwork online, make sure that you have everything the insurer needs. And check if you have soft copies of the correct paperwork ready.
Submitting wrong or incomplete documents could simply delay the process further, and your policy may take longer to be issued. To avoid the hassle of waiting around for too long, it’s best to get your paperwork right the first time around. That way, you can ensure that you are protected sooner than later.
Be smart about the riders you choose
Term plans are pure protection plans. And while they’re very affordable, you may want to increase the coverage they offer and look for financial protection in scenarios like an accident, a critical illness, or a disability. Riders can help you here. They enhance the coverage your term plan offers.
You have riders that give you different kinds of benefits. For instance, riders like the ABSLI Critical Illness Rider (UIN: 109B019V03) give you financial benefits upon diagnosis of any specified critical illness. Riders like the ABSLI Hospital Care Rider (UIN: 109B016V03) offer cash benefits in case of hospitalization. You can check out the benefits from various riders online. Just make sure that buying too few riders can be just as much a mistake as buying too many. It’s best to only add on the riders that you may need.
Please note: There are exclusions attached to the rider, please read rider brochures before concluding sale. Please consult your financial advisor or visit our website for further details.
Keep your account credentials safe and accessible
Your insurance provider may ask you to create an account on their website. Additionally, you will also have an eInsurance Account opened, so you can store and access your term policy and other insurance plans digitally. Keep the credentials for all of these accounts safe and accessible.
And above all, make sure that you do not share the details with anybody. Set up a strong password - one that you will remember - and change it periodically in order to ensure better security.
The bottom line
That sums up the key things you need to keep in mind if you’re buying term insurance online. Term insurance is best bought at an early stage in life, when you’re younger. This is because the younger you are, the lower the premiums will be. And once you make your purchase online, ensure that you keep a digital copy of your policy document offline too, for easy access.
Read next: HOW TO RESEARCH FOR THE BEST TERM INSURANCE PLANS?
As you’ve seen, research is a key part of buying term insurance online. Want to know what you need to look into to zero in on the best term insurance policy? Our blog on this subject can help you out with that.
ONE TERM PLAN, TEN PLAN OPTIONS - AND ALL OF IT IS AVAILABLE ONLINE!
Looking to secure your family’s future without loosening the purse strings too much? A comprehensive term insurance plan is just what you need. One like the ABSLI DigiShield Plan.
10 plan options. An option to avail life cover till 100 years of age. Flexible payout options. And easy to buy online.
Doesn’t it check all the right boxes?
ABSLI DigiShield Plan (UIN 109N108V05) is a non-linked non-participating individual pure risk premium life insurance plan; upon Policyholder’s selection of Plan Option 9 (Level Cover with Survival Benefit) and Plan Option 10 (Return of Premium [ROP]) this product shall be a non-linked non-participating individual life savings insurance plan.
ABSLI Life Shield Plan
A term insurance plan that offers you the flexibility of plan options suitable for your family's non- negotiable goals and ensure they need not compromise on their lifestyle. UIN: 109N109V04
- Choice of 8 plan options
- Cover your spouse under the same policy
- Longer Life cover till age 85
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