How to buy Term Insurance online in India: A step-by-step guide

Buying Term Insurance online generally takes six steps: pick an insurer's website, browse their Term Plans, review the plan documents, share your personal details, customise your cover and add-ons, and submit your application. What follows after submission, the medical checks, underwriting, and document verification, is where most of the actual time goes, not the browsing itself. Here is what each stage involves.

What are the steps to buy Term Insurance online?

Step 1: Search for the insurer's website you want to buy from.

Step 2: Go to their Term Insurance section to view the plans on offer.

Step 3: Review each plan's prospectus and policy wording to understand its benefits before deciding.

Step 4: Once you have picked a plan, enter your personal details as requested.

Step 5: Customise the plan to fit your needs, choosing your cover amount, add-ons, and policy term.

Step 6: Submit your application.

How do you choose the right Term Insurance Plan online?

• Sum assured: Work out your family's short and long-term expenses, then compare that to what you already own in savings, FDs, and investments. The gap between the two is roughly the cover amount you need. Factor in inflation on this figure so today's cover stays adequate for your family in the future.
• Policy tenure: This is how long the cover lasts. Options commonly run to age 60, 65, or 70, and some plans extend to 99 or 100 for those who want lifetime cover.
• Premium payment duration: You can pay premiums for the full policy term (Regular Pay), for a shorter fixed period (Limited Pay), or as a single upfront payment (Single Pay).
• Premium payment frequency: Choose yearly, half-yearly, quarterly, or monthly, based on what fits your cash flow. Yearly payments suit those who can manage a larger lumpsum. The others spread the cost out.
• Claim payout option: Decide how your family would receive the payout- as a lump sum, as monthly instalments over a set period, or as a combination of both.
• Increasing cover: This option raises your sum assured automatically over time, up to a specified limit, which helps keep your cover from losing value to inflation.
• Riders: Riders are add-ons that provide extra protection for a nominal additional premium. Common ones include Critical Illness, Accidental Disability, Accidental Death Benefit, Surgical Care, Hospital Care, and Waiver of Premium riders. Availability varies by insurer.
• Insurer selection: Once you know the features you want, look for an insurer with a strong claims track record and good customer service, and check reviews from existing policyholders before deciding.

What happens after you apply?

• Once you submit your details, you receive a benefit illustration, a document laying out your policy tenure, premiums, riders, and any surrender or maturity values. Review it carefully before proceeding.
• The application itself will ask for personal details (occupation, age, income, education, address), lifestyle details (smoking, alcohol use, hobbies), medical history (yours and your family's), and basic measurements like height, weight, and blood pressure, along with nominee details. You'll also need to submit documents for proof of age (PAN, Aadhaar, passport, voter ID) and proof of income (salary slips, bank statements, Form 16, or ITRs, depending on your employment type).
• After submitting documents, you need to make your first premium payment. It is worth setting up a bank standing instruction for renewals rather than linking a card, since cards expire and can cause a missed payment.
• Depending on your declarations, you may need a medical evaluation, which can include blood tests, an ECG, or other checks. The insurer's underwriters then assess your income, documents, and medical results to decide whether to accept your application, reject it, or offer it with a loaded premium.
• Once issued, you get a free look period of 30 days to review the policy document. If you are not satisfied, you can return it for a refund of the premium paid, minus certain deductions like stamp duty and administration charges.

Also read:

• Is Term Insurance Valid Outside India? A Guide for NRIs
• How to Switch From Group Insurance to Individual Term Insurance?
• Should You Use Surplus Funds to Buy Term Insurance?