Ch. 14: Endowment Plans - Where to Buy?

Both you and your mom are shopaholics. She enjoys shopping for clothes offline because she likes to feel the fabric, check the size, try on the dress, and take it home right away. On the other hand, you prefer shopping online, as it is quite convenient, and you can do it from your office or your home, even while on vacation. Another perk of online shopping is that discounts are always available!

Likewise, when it comes to Endowment plans, you have a multitude of options as to where you can buy the policy from. Is buying from an insurer's website a good idea? What about banks or insurance aggregators?

Choosing the right one can be a daunting task with so many options out there. In order to avoid hassles later on, it is extremely crucial to consider all the pros and cons of each option before purchasing the policy.

In the previous article, we discussed the important things to keep in mind while buying an endowment plan. Now let’s see where you can purchase the plan.

The following avenues are available for the purchase of endowment plans:

• Online from any insurance company's official website
• Online insurance aggregator or broker
• Banks
• Financial advisors

Here's a detailed analysis of each option to help you make a well-informed decision.

A quick and straightforward way to purchase Endowment Plans is through the insurer's website or app (if available). Initial processes, including filling out forms, submitting documentation, and more, can be done on the website or app.

Pros

• Insurance websites allow you to buy insurance from the comfort of your home without having to visit an insurer's branch office.
• These websites may give you additional perks and discounts.
• You will be able to get first-hand information about the company and the product.
• It is likely that the insurer will have access to the latest products before they are made available to other parties.

Cons
Comparing policies from different insurance companies is not possible from an insurer's website. If you want to do so, you will need to explore countless websites, download brochures, examine them, compare features, prices, benefits, etc., and then make a decision.

Purchasing policies via aggregator websites is a breeze since they have multiple products from different brands displayed on the same page - you can compare these and pick the one that best suits your needs.

Pros

• Web aggregators enable you to go through a wide range of insurance policies from multiple insurance companies through a single website.
• An end-to-end comparison of features and prices of several insurance policies is possible.
• Moreover, you may also be eligible for exclusive discounts and offers on insurance products.
• Most aggregator platforms implement new technologies and advancements on their websites for optimum user experience.

Cons

• If you have a policy-related query, the call centre agents might redirect you to speak with a different insurance agent each time.
• Some insurance aggregators may only be concerned about their sales targets rather than managing claims. Therefore, you should ensure the aggregator has a good claims history before purchasing the policy.

In response to the growing demand for insurance, banks have begun selling an array of insurance products, including endowment plans.

Pros

• Banks offer a sense of security as you will be dealing with an existing banking relationship manager.
• Documentation becomes a lot easier. Your bank may already possess some of your documents, which will be utilised to purchase insurance, such as your ID proofs like Aadhar card, PAN card, etc.

Cons

• There is a possibility that the bank may delegate claim handling to the insurer. Therefore, you might need to work directly with the insurer during the process of filing a claim or if you need any other assistance.

A financial advisor is someone who is responsible for your entire experience - from policy research to claims settlement.

Pros

• The right financial advisor will stay by your side through the entire process - they'll help you with the purchase, provide you with the form to fill out, collect and submit your documents on your behalf, and ensure that your policy reaches you on time.
• Your advisor will assess your priorities, needs, financial goals, finances, and other aspects before recommending insurance policies.
• A good financial advisor will help you or your nominee with claim settlements during times of claim - they will follow up with the insurance company on your or nominee's behalf to facilitate a quick settlement.
• Since they strive to maintain a good reputation and public image, they are genuinely interested in developing a bond with you.

Cons

• According to IRDAI guidelines, financial advisors are allowed to recommend only one insurer for each of the categories of life, non-life, and health insurance. Hence, you will have less choice or possibility of comparison.
• A financial advisor won't give you any discounts or special offers.
• It is imperative to choose an insurance advisor carefully. Some financial advisors focus on building long-term customer relationships and providing quality service, but some are interested only in commissions and may sell products that are of no use to you. It's wise to look up the track record of financial advisors.

So, these are some of the pros and cons of buying an Endowment plan either online from the insurer or web aggregator's website, and offline from a bank or a financial advisor. Take some time to carefully analyse the benefits and disadvantages of each of these options and choose the one that is right for you.