Ch. 15: Different Ways of Buying Money Back Plans

You meet two of your college friends, Jay and Arjun, for dinner after a very long time. While you guys are talking, you tell them you’re looking to buy a Money back plan but aren't sure where to buy it from. Surprisingly, both Jay and Arjun recently bought Money back policies. Arjun got it from a financial advisor, whereas Jay bought it directly from the insurer's website. While Jay received substantial discounts, Arjun claims that his financial advisor assisted him and made the process more easier. Both of them spoke about their purchase experiences, which are vastly different.

After hearing about their experiences, you're even more confused about where to purchase a Money back plan. You know the benefits it offers and the customization you need, but can’t decide where you should buy it from. Should you, like Jay, buy it through the insurance company's website to take advantage of the discounts? Or should you purchase from a financial advisor? Or are there any other options?

Let’s find out!

You can buy a Money-back plan -

1. Online from the insurer’s website
A Money back plan 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.

2. Online from any web aggregator
Aggregator platforms are like an online marketplace. A variety of insurance products across insurers are displayed on a single page. They allow you to research, compare and select a plan that perfectly fits your needs. There are around 20 online aggregators in India currently.

3. Offline from a bank
Banks sell a wide range of financial products, one of which is insurance. They are a sort of a marketplace for insurance plans, similar to web aggregators, but they are generally exclusive for the people who hold a bank account with the bank. It acts as an intermediary between you and the insurance company.

4. Offline from a financial advisor
A financial advisor is someone who will own your entire experience - right from research, to purchase, until the claims process. They will act as your single point of contact with the insurer.

Now, let’s learn about the pros and cons of buying a Money back plan from each of these options.

Pros Of Buying From An Insurer’s Website

• Insurance companies may give additional perks and discounts that are not available elsewhere.
• Some insurance companies have developed good technological platforms - websites and mobile applications. With these platforms, you can make the purchase without needing to visit the insurer’s branch office.
• Because you're working with an organisation, you'll have institutional support throughout your insurance journey.
• Purchasing directly from the insurer also ensures that you receive firsthand information about the plan you're considering buying. You may also get access to newer products first before they are distributed through other channels.

Cons Of Buying From An Insurer’s Website

• You won't be able to compare multiple insurance policies from different insurance companies on the same page. To compare, 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.

Pros Of Buying From A Web Aggregator’s Website

• On a single website, web aggregators allow you to access a variety of insurance policies across categories and insurance companies.
• You can compare the features, benefits, limitations, premiums, etc. of several Money back policies offered by various insurance companies and decide which one to buy.
• The experience on most aggregator platforms is smoother and the systems are more resilient as aggregator platforms are often quick to incorporate new technologies and innovations that improve user experience.
• You may also get exclusive discounts and offers on some insurance products that you won't find anywhere else.

Cons Of Buying From A Web Aggregator’s Website

• Because the transaction is handled by a call centre, you may need to speak with a different individual each time you have a policy-related question.
• 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 be more concerned with sales and distribution than claims management. So, to avoid any hassles at the time of claim, ensure you check the aggregator's claims history before buying from them.

Pros Of Buying From A Bank

• If you’re buying from a bank, you'll be dealing with your existing banking relationship manager - so, you won't have to deal with multiple people. You can also strengthen your bond with the bank and its officials, which will benefit you in the long run.
• 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 a Money back plan.

Cons Of Buying From A Bank

• According to IRDAI regulations, banks can only sell policies from one insurance company in the health, life, and non-life insurance categories. As a result, you won’t have many options to select from.
• Banks are like a supermarket with a variety of financial products under one roof - but they might not be able to assist with claims. They may leave the entire claim management to the insurance company. So, you might have to work with the insurer directly at the time of a claim.

Pros Of Buying From A Financial Advisor

• Before recommending insurance plans, an advisor will understand your preferences, short-term and long-term financial goals, budget, etc.
• A good financial advisor will guide you throughout your insurance journey - they'll assist you with the purchase, help you fill out the proposal form, submit the documents on your behalf, and ensure that your policy is issued on time, without any hassle.
• They will be genuinely interested in building a relationship with you as they have a reputation to uphold. They are likely to form long-term relationships with you and your family so that they can sell products through referrals.
• A good financial advisor will also provide exemplary assistance at the time of claims - they will follow up with the insurance company on your or your nominee’s behalf so that the claim is settled quickly.

Cons Of Buying From A Financial Advisor

• You won’t get any discounts or special offers while buying from a financial advisor.
• As per IRDAI rules, a financial advisor can only offer insurance products from one insurer in each of the three categories of life, non-life, and health insurance. So, your options will be limited.
• Be cautious when picking a financial advisor for your insurance needs. While some advisors aim to build their business on a long-term reputation, there are financial advisors who are only interested in incentives and hence, may missell.

So, these are some of the benefits and drawbacks of buying a Money back plan either online from the insurer or web aggregator’s website or offline from a bank or a financial advisor. Before you decide where to purchase your Money back policy from, ensure you weigh the pros and cons of each of these options carefully.