Online Term Plans vs. Traditional Purchases: Which is Better?

With the rise of fintech companies and online insurance providers, consumers today have more choices than ever when purchasing term life insurance. Traditional offline purchases through an insurance agent still make up most of term life policies sold, but online term plans are rapidly gaining popularity. So, which is the better option for today’s buyers – online or traditional? This blog breaks down the key differences to help you decide.

Lower Premiums with Online Term Plans

One of the most significant advantages of purchasing insurance coverage online is the cost savings. Online insurance providers have lower overhead expenses compared to traditional brick-and-mortar insurance companies. 

 

Without physical offices and large agent networks to support, online providers can pass the savings directly to their consumers through lower premiums. Depending on personal factors like age and health, buyers can save anywhere from 15% to 40% on their annual premium by choosing an online term life plan.

Greater Convenience and Faster Application Process

Applying for insurance coverage through an online platform is significantly more convenient than taking the traditional route. The entire application process, from getting quotes to submitting proposal documents, can be done digitally from the comfort of your home. 

 

This translates to a much faster turnaround time. While offline application processing can take 4-6 weeks, online term plan applications are often approved within a few weeks. Accelerated underwriting using data analytics aids quick decisions.

A more comprehensive Range of Policy Options

Online insurance marketplaces utilise digital technology to offer consumers many more choices. By filling out one form, you can compare term life quotes from multiple top term insurance providers in India. 

 

Offline purchases may limit you to only the policies the concerned agent represents. However, the online selection of available term plan variants is more comprehensive regarding different coverage terms, premium modes, and riders. You have the freedom to customise the coverage to suit your budget and needs.

Enhanced Transparency

A persistent complaint against traditional insurance purchases is the lack of transparency. Complex policy documents and confusing explanations by the agents often leave buyers unaware of what their plan truly offers. 

 

In contrast, online insurance platforms invest heavily in consumer education around term insurance. Detailed policy information, expert videos, and personalised advisors online provide complete clarity on policy benefits, exclusions, and claims process before the purchase.

Areas Where Traditional Purchases Shine

While online term plans have many advantages, traditional offline purchases have benefits. Working with an experienced advisor face-to-face lets you get expert advice tailored to your financial situation. 

 

Offline purchases make sense for consumers who prioritise personal touch and human interaction. Apprehensive buyers also appreciate meeting agents and company representatives before investing in coverage.

 

Certain exclusivities, like access to specific insurer’s term plans, may only be available offline in some areas. Lastly, the claims process for traditional policies purchased through agents may potentially be more straightforward compared to third-party online aggregators.

Conclusion

Online term life insurance makes more financial sense for most buyers today. The premium savings, convenience factor, and transparency digital platforms offer are unmatched. 

 

However, traditional purchases suit certain consumer segments, like those who value personal attention or access to specific insurers. You should assess your needs and priorities to decide which purchase method would work for you.