5 Big Reasons to Buy Online Term Insurance
Most insurance companies are offering online term insurance plans. Term insurance plans are term-based solutions for life. Policy holder of term insurance plans needs to pay a certain premium amount at chosen frequency periods up to certain number of years. Term insurance plans essentially offer life cover with additional benefits. Compared to pure life insurance plans which provide only life cover and no additional benefits, a term insurance plan can be a comprehensive solution life plan. There are several term insurance plan schemes and these offer several types of additional benefits. Besides the main life cover benefit term insurance plans have additional benefits packed in a single product and these may include:
- Investment growth
- Health, critical illnesses,and accident cover
- Maturity and survival benefits
- Withdrawal facilities
- Regular Payout
The undermentioned reasons are the five major reasons for the increasing purchases of online term insurance plans. These have been discussed below singularly:
Online term insurance plans are less expensive than offline plans
Most insurance companies offer online term insurance products at reduced premium rates than their offline counterparts. Until sometime back online term plans were almost up to 30% cheaper regardinga premium than their offline counterparts. The cheaper online term insurance schemes provide the same benefits, features,and covers as the offline counterparts. Online term insurance policies may be cheaper than offline ones for several reasons like insurance companies want to boost up online scheme sales, insurance companies have to incur lesser promotion costs for online products as compared to offline products, online transactions (sales, purchase, payments) are time and cost efficient than the offline processes.
The online portal calculator tools and smooth navigation access makes a comparison of schemes an easy matter. There may be hundreds of term insurance plans, but the portal tools can sort them out within seconds on applicable parameters that include insurance product ranking, features and benefits and top insurance company offer. It takes less than thirty minutes to decide upon the best-fit term insurance plan and complete the purchase procedure over the secure online platform. Subscribers can save up to 40 % on premium amounts by making the product choice best fit for them.
Purchasing term insurance plans online is secure
Many people may still have doubts regarding online purchase of term insurance plans. Top insurance companies have cited the reluctance of the public to adopt an online mode of purchase as the major hurdle towards the growth of online term insurance plans. Insurance companies have started several initiatives to make the online mode of transaction acceptable to people. These include any time online access of the purchased insurance policies, any time access to product-related information, online chat facility, secure online payment gateways and several more features that make online navigation and transaction a rich experience for the users.
Term insurance plans can be securely purchased within just a few minutes from accredited portals. You can purchase term insurance plans directly from the insurance company portal or through Policy bazaar aggregator portal. The Policy Bazaar portal is equipped with online tools that provide a ready comparison of top online term insurance plan schemes and can lead to savings in premiums up to 40 %. The aggregator portal has linkages to top insurance company portals. Portal visitors can easily open an account on the online portal and start purchasing term insurance plans and investment schemes. The online portal provides a secure payment gateway system,and term insurance plan purchasers can pay by several means include debit card, credit card, UPI and net banking payment methods among others. The payment transfer occurs from account to account through online OTP enabled process and purchaser receives immediate notification regarding the transaction.
The form for subscribing to a term insurance plan can be filled online,and all the documents can be uploaded online. The subscriber may need to submit the standard documents to establish address and identity proof, as well as other specific documents. The main documents can include scan copy of Aadhaar, Pan card, a scan of passport size photograph, scan copy of first and last pages of passport, scan copy of gas bill not earlier than three months and other document proofs.
Online term insurance plans provide comprehensive cover
Term insurance plans purchased online are backed by policy document and brochure. Before purchasing a term insurance plan from the online portal, the subscriber may go through the policy document and brochure by downloading it from the portal or portal linkages. Top insurance companies have stated the policy terms and conditions, features and benefits clearly in the policy documents in accordance with the IRDA guidelines. Top insurance companies are ensuring a high level of transparencies.
Online term insurance plan documents mention the main life cover benefit as well as the additional benefits which the policy holder has opted. The online policy document mentions in clear terms the inclusions and exclusions of the policy and how to raise a claim in the event of a mishap. The policy document mentions the premium amount, frequency of premium payment, sum assured amounts, the tenure of term insurance plan and benefit payout periods.
When subscriber purchases a term insurance plan, after the completion of the online purchase procedure, the subscriber receives the policy document on his or her registered email id. The insurance company also sends the policy documents through courier at the registered physical address of the subscriber of the term insurance plan usually after the fifteen days cooling period.
Online term insurance plans have tax benefits
As per new income tax rules announcements, section 80c and 80d tax benefits can only be claimed for online payments of insurance schemes.
Online term insurance plans are total solution plans. Term insurance plans include best life insurance plansas the major cover and other covers and benefits that make the term insurance plan more comprehensive. Almost all benefits and covers available under the term insurance plans are eligible for tax benefits under the sections of the income tax act.
Section 80 c provides tax deduction benefits on the contributions to life insurance cover and unit-linked investment. The deduction claimable under section 80 c is a maximum of Rs 1.5 lakh. Further to section 80c, section 80 d has provisions for deductions on the health insurance contribution up to a maximum limit of Rs 60,000 in the financial year 2017-18. In the financial year 2018-19 the maximum deduction, benefit is expected to go up to Rs 1 lakh as per this year’s budget announcements towards senior citizen tax relief. Deduction benefits are applied by deducting the contributed amount from the income base on which the tax rate is applied to calculate income tax.
Term insurance plans also qualify for exemptions under section 10 of the income tax act if a component of the term insurance plan premium is being invested in schemes. If the term insurance plan is a ULIP plan then under section 10, any kind of returns, benefits or withdrawal from the term insurance plan account is exempt from taxation. Income from any source if exempted from taxes need not be added to the income base for the computation of income tax.
Online term insurance plans offer flexibility
Term insurance plans offer flexibility in several aspects. Subscribers can choose the life cover amount as well as the premium. Term insurance plan subscribers can also choose among the additional cover options under total term insurance plan solutions. Additional covers can include health cover, critical illness cover as well as accident cover. Thus subscriber has the flexibility of choice for making his or her term insurance plan more comprehensive.
Pure life insurance plans cover for the life of the policy holder. In the event of the demise of the policy holder nominee is entitled to claim death sum assured amount. Term life insurance plans provide covers and benefits that can be extended to other family members as well. Thus family members can become a term insurance plan policy,member. Apart from the life insurance cover, policy members can avail health cover, personal accident cover and critical illnesses cover, children can benefit from child plan, the maturity and survival benefit can be for policy holder as well as policy members. Term insurance plan can also provide life cover to a major member like the spouse of policy holder apart from the main policy holder. Thus term insurance plans provide flexibility in terms ofa number of policy members.
Term insurance plans linked with investment schemes offer flexibility to subscribers in terms of investment portfolio options. ULIP term insurance plans offer up to four free fund switches in a year. Thus policy holder may choose out of conservative, balanced, growth and other portfolio options and if desired can make fund switches without incurring extra costs.
Online term insurance plans offer flexibility with respect to premium payment frequency. Policy holders can choose to pay the premium amount as a yearly lump sum or half-yearly, quarterly, or monthly. Term insurance plans also offer flexibility regarding premium amount and sum assured amount.
Another flexibility feature of term insurance plan is the benefit payout option. Policy holders can opt for lump sum benefit pay out option or periodic pay out option.