How to buy Term Insurance online: A complete guide

Even though the entire conversation sounds a bit ironic, given India is one of the leaders in digital adoption in the world. From e-commerce to bill payments to digital transactions, digitalisation has affected every aspect of our lives. In such a scenario, it could be rather baffling to notice that only 13% of Indians prefer buying insurance online.

If you are wondering how the entire process of buying term insurance online works, this can be the perfect guide. Towards the end of the guide, we will also bust a few myths about buying term insurance online.

Why buy term insurance online

Let’s answer the basic question first. Why should you buy term insurance online at all? Well, India's online insurance market (measured by premium value) is projected to grow at a compound annual growth rate (CAGR) of 12.20% between 2024 and 2029. This growth would simply mean that the conventional insurance networks might be insufficient to cater to the increased demand for term and other insurance. Additionally, much of this demand will be created due to digitalisation and the increased internet reach in Tier II and III cities.

And let us not forget how convenient and quick the entire process is. The next point elaborates on convenience and accessibility factors.

Convenience and accessibility

The convenience and accessibility of digital solutions (such as insurance) have significantly disrupted the industry. For a country with a large rural population and people living in Tier II and III cities, online options can be a blessing.

The limitations of buying a term plan from an agent or a physical office can also be geographical, such as the absence of a physical office or an active agent in an area. The solution is still the same: purchase an online policy from the convenience of your home.

Consider this example: Sanjay is an IT engineer working night shifts for an American multinational company. He wants to purchase a term insurance plan and tries contacting an agent. However, the agent is only available during the morning shifts, when Sanjay is unavailable. The simple solution? Buy term insurance anytime online!

In addition to convenience, and contrary to popular myths, many customised and personalised offers are available online, something conventional networks cannot offer due to logistics challenges. Let us discuss customisation and personalisation.

Customised and personalised products

The fact that you cannot fit each person into the same box is true philosophically and financially. Each individual is different, and so are their financial situation and needs.

For example, Raj, a 25-year-old young professional working on a startup and building his career, will have different needs from Priya, a 40-year-old single mother on whom her family depends. Raj might need a basic term plan to cover personal loans and future liabilities. At the same time, Priya would require a comprehensive plan with higher coverage to secure her children's education and living expenses.

However, customising term plans to meet customers' physical needs is difficult, as agents have restricted authority and other limitations. In contrast, companies work more closely with customers online, offering tailored solutions that suit their needs.

After we have clarified the benefits of buying online, we will examine a few steps to help you make an informed decision to buy term insurance online.

How to buy term insurance online

Working on the formalities of online purchases can feel tricky. If you are also wondering about how to buy term insurance online, here is a quick guide for you:

Do an initial research

The first thing you need to do is research the available policies. To do this, you can do a quick Google search for the various term policies available.

Dig in a bit deeper

Once you have done preliminary research, it is time to dig a bit deeper. Properly research the terms of the policies, and look if the company is providing any customisation options. If there are customisation options, see the best deal you can get.

Compare the policies

Once you have the final quotes, compare all the policies. The metrics you should consider include the premium amount, sum assured, policy tenure, rider options, exclusions and waiting periods, and tax benefits. Based on their merits, shortlist the policies that feel the most beneficial.

Research the company

Now that you have the list of the policies you like the most, research the insurance companies that provide them. Research their Claim Settlement Ratio (CSR) for current and past years. You should also look into their financials and general dealings to ensure the company is reliable and will pay you the amount you are assured of on time.

Make the purchase

Now comes the actual part of purchasing the policy. The procedure to purchase a policy online is straightforward. Each company has an online form asking for relevant information, such as contact information, age, gender, annual income, medical history, etc.

You must also list nominee details and fill out a KYC form. Generally, companies have assisted form filing that ensures you are assisted with advice on correctly filling the form. With Aadhar-based KYC and UPI-supported payments, you get a policy bond within a few minutes.

Payment and policy copy

Once all these formalities are completed, all there is left to do is make the payment. Based on your preference, you can pay through a debit card, credit card, or net banking. After making the payment, you will receive confirmation of submission. The company will then process your policy and, upon approval of your policy, will share a soft and/or hard copy of the plan with you.

Mistakes to avoid

When purchasing a term insurance policy online, you should take care of the basics as you would when buying the policy offline. This means avoiding generic mistakes like:

• Opting for an insufficient term insurance cover
• Selecting a shorter policy term
• Unreasonably delaying the purchase of life insurance
• Not sharing correct medical information or hiding crucial facts

Summing up

Purchasing a term insurance plan is a significant financial decision; therefore, ensuring you get the best deal is crucial. Purchasing online ensures you get a better, more flexible, and custom deal without any inconvenience or disturbing your schedule. You can even easily compare different offers and cherry-pick the one that best suits your needs.

All you have to do is ensure you only visit authorized websites and follow their instructions not to fall prey to cyber fraud. Before we bid adieu, here is a list of some popular myths about buying term insurance online that we busted.

Buying Term Insurance Online: Busting Some Popular Myths

Difficulty in understanding the product:

Myth: It’s hard to understand the product online without human guidance.

Truth: Online platforms offer dedicated chat support and resources to clarify every detail, ensuring you’re never left in the dark.

Not technically sound to buy insurance online:

Myth: You must be highly tech-savvy to purchase insurance online.

Truth: Basic computer and internet knowledge is all you need to easily buy insurance.

Lack of assistance:

Myth: You’re on your own when buying insurance online.

Truth: Online assistance is readily available—often 24/7—to guide you through every step of the process.

Few plans available online:

Myth: Only limited insurance plans are offered online.

Truth: The same wide range of insurance products you’d find with an agent is readily accessible online.

Online insurance is costly:

Myth: Purchasing insurance online is more expensive.

Truth: Going online often reduces costs by cutting out agents and their commissions, making it more affordable.

Fear of online card fraud:

Myth: Using cards online for insurance is risky.

Truth: Insurers use SSL-certified servers and robust security measures, protecting your financial information from fraud.

Inconvenient claim settlement:

Myth: Settling claims online is complicated and slow.

Truth: Online claim settlement is straightforward—often more convenient—allowing you to submit documents and track your claim from anywhere.

Misuse of personal details:

Myth: Personal data shared online is easily misused.

Truth: Insurance companies employ high-level security protocols, making hacking nearly impossible and safeguarding your personal details.