>> Monday, August 29, 2011
Till 21 months ago life insurance as a product category was only sold through intermediaries. These could be life insurance agents, corporate agents, banks and brokers. These sales were driven largely by the commissions to be derived from such a sale and less by the needs and interests of customers. This resulted in a basic dichotomy that lead to a large number of dissatisfied customers who felt that they had either, been a sold a product they did not need or one which only partially fulfilled their needs. This remains a problem with intermediated selling where often the interests of the intermediary supersede the interests of customers.
The interests of the intermediary also lead to the creation of a number of insurance myths or legends. The most common myth was insurance was too complex a product to be bought by a customer. It needed the intervention of an intermediary to explain the product to the customer and facilitate the buying process. Today in category after category, including life insurance, it has been proven that there is a section of customers who do not need intermediation and are quite capable of making informed choices on their own. This is fuelling online sales of financial products including life insurance.
If you are a customer who is online and is comfortable using the internet and have some experience of having made an online purchase then maybe it is time you seriously looked at buying your life insurance online. Yes there are number of good options that are available on the internet for you.
In October 2009 a new entrant in the life insurance field took the bold step of launching a term product that was meant exclusively and designed specifically for online purchase. The product called AEGON Religare iTerm Plan was designed in such a way that the savings from distribution and other expenses were passed on to the customer resulting in great savings ranging from 10-70% - depending on age and policy term. This plan was immediately successful and continues to be one of the premier online plans available in the market. Today however there are options available from ICICI Prudential, Kotak Life, Metlife and AVIVA. This availability of products has expanded the market and has brought term insurance, classically a neglected category amongst both life insurance companies and intermediaries, back into the limelight. More importantly it has busted the myth that there is no ‘self-service’ market for life insurance products.
Today more and more customers are going online and buying life insurance for protection.
While the market is focusing on term plans AEGON Religare has again taken the lead and has launched another online plan which offers protection on a unit-linked platform – the AEGON Religare iMaximize Plan. This means that the product is structured in a manner so as to provide protection against death, income protection and protection of goals and ambitions. This works through a triple benefit feature. If the person who is the insured were to die his nominee/s will get immediately upon death the sum assured. In addition for the remainder of the policy term the nominee/s get an annual income equivalent to the annual premium paid and lastly, the company continues to pay the annual premium and keep the invested fund alive till the maturity of the plan wherein the nominee/s get the fund value.
This plan provides a triple protection layer that sets it apart from other plans in the market. As it is an online plan there is no premium allocation charge thus maximizing the life insured returns. It can be bought online through an 8-10 minute buying process. It is likely that we will see more such plans from other companies as well in the future.
Hence, the reasons why buying life insurance online is beneficial is that it provides you with value, is convenient - it can be done from you home or office anytime and most importantly you buy a product that you decide upon and not what an intermediary wants to sell. So if you’re comfortable go ahead and buy your life insurance online you’ll see value in it.