Ch. 11: Where to Buy General and Single-Premium Annuity Plans: Know The Pros and Cons

From a simple purchase to finding great deals, the internet is easy access to anything and everything out there. You can sort items using filters and complete the entire purchase with just a few taps and clicks. Everything, from apparel to grocery to even insurance, can be added to your digital cart.

However, the sense of comfort and trust that you can experience while shopping offline is still unmatched. So when it comes to buying Annuity Plans, should you purchase it the quicker and easier way, or go with the traditional method?

General Annuity Plans convert your periodic investments into a steady stream of income after you retire. And Single-Premium Annuity Plans convert your lump sum amount into a retirement income. Both of them are essential in their own ways, and you should go for the one that suits your needs the best. After you have made that decision, you need to compare and contrast all the sources you can buy your plan from. In this article, let’s take you through them!

You can buy them from 4 sources:.

• Insurance company’s websites (online)
• Insurance aggregators (online)
• Banks (offline)
• Financial advisors (offline)

Now let’s get into their intricacies so you can make a clear decision.

General and Single-Premium Annuity Plans can be purchased directly from the insurer's website or app (if available) quickly and easily. The form-filling, documentation, and everything else will take place on the website/ app itself.

What are the pros?

• The biggest perk is that you can make a purchase from the comfort of your home, without needing to visit the insurer’s branch office.
• You can get first-hand information about the company and the product you’re purchasing.
• You may also get access to newer products before they are distributed through other channels.
• Insurers may give additional perks and discounts that are not available elsewhere.
• Because you are dealing with an organisation and not a third-party, you will have institutional support throughout.

What are the cons?

• You wouldn’t be able to explore multiple insurance policies and compare them on the same page.
• If you want to make a comparison, you’ll have to go through numerous websites manually, download brochures, personally scan them, evaluate the features, benefits, costs, etc. and then make a choice. That is a hectic task.

Aggregators are basically an online marketplace. Various insurance products across insurers are displayed on a single page. This helps you explore, research, compare, and select a plan that perfectly fits your needs.

What are the pros?

• On a single website, web aggregators allow you to access a variety of insurance policies across categories and insurance companies.
• The features, benefits, limitations, premiums, etc. of several General and Single-Premium Annuity Plans available can be compared and contrasted.
• Aggregator platforms are often quick to incorporate new technologies to improve user experience - making your purchase a lot smoother.
• Exclusive discounts and offers may also be available on some insurance products.

What are the cons?

• For policy-related questions, you may need to speak with a different individual each time, since the transactions are handled by a call centre.
• For service requests or to resolve queries, aggregator platforms may direct you to the insurer's call centre or branch office.
• Some insurance aggregators might not be good at claim management. Hence, before buying, always check the aggregator's claims history, to avoid any hassles at the time of claim.

Banks act as an intermediary between you and the insurance company. They are similar to web aggregators, but are generally exclusive for the people who hold a bank account with them.

What are the pros?

• There’s a sense of comfort and trust, because you won’t be dealing with new people, but your existing banking manager.
• The documentation process will be easier as the bank may already have some of your documents, such as your ID proofs like Aadhar card, PAN card, etc. required for purchasing the annuity plans.

What are the cons?

• Banks are like a supermarket with a variety of financial products under one roof. However, they might not be able to assist you at the crucial time of claim settlement. They may leave the entire claim management in the hands of the insurance company. So you might have to work with the insurer directly during the claims process.

A financial advisor is a professional who will guide you throughout the entire experience - right from research and purchase to claim settlement. They will act as your single point of contact with the insurer.

What are the pros?

• A good financial advisor will first understand your preferences, short-term and long-term financial goals, budget, etc., before recommending any policy.
• They'll assist you with the purchase, help you fill out the proposal form, submit the documents on your behalf, and ensure your policy is issued on time, without any hassle.
• Advisors have a reputation to live up to as they are likely to build long-term relationships with families, and sell products through referrals. Hence, they will be genuinely interested in helping you and building a trustworthy relationship.
• They will follow up with the insurance company on your or your nominee’s behalf, so that the claim is settled quickly - giving you an exemplary experience.

cons?

• There will be no discounts or special offers while buying from a financial advisor.
• It’s important to find out more about the track record of financial advisors before you buy from them. While some advisors aim to really help you and build their business, there may be some who are only interested in incentives and hence, may missell.

You don’t just invest in a retirement plan, you invest in a secure future. We hope this article will help you explore your purchase options. Online or offline - go for the one that makes you feel more confident about the purchase. Because at the end of the day, your satisfaction is all that matters.