A recent report by The Boston Consulting Group and Google said the percentage of customers purchasing insurance policies online had gone up steadily over last year. Health insurance buyers had increased from 13 per cent in 2012 to 19 per cent; motor insurance also went up from 13 per cent in 2012 to 16 per cent.
When to buy online
Buying insurance online makes sense for a consumer, irrespective of age or product – purchasing online is cheaper and more transparent than offline. However, an exception can be in special cases or if the consumer is in a high age bracket.
For instance, if you are less than 25 years of age and have no dependents, then it is very easy to buy any plan online. But if above 45 years, buying a term plan or health insurance online could be more difficult. Such customers are usually considered riskier by companies due to their age or because they might have some ailments. Hence, chances of the policy getting rejected are higher. Or, such customers may be charged a higher premium. So, if you are in such a category, it is advisable to take the help of an agent. Who can then advise you on how much premium you can afford, given your age and income, and which company to choose from, depending on the exclusions and diseases covered.
“An online policy is meant for those who are internet-savvy and can do some research and purchase on their own. It is for those not needing assistance,”
An agent might do all your paperwork and all you need do is sign. But there can be major cases of misrepresentation, affecting your chances of claiming. “It is just a perception that insurance requires assistance from an agent.
Sometimes, you might need an agent’s help when there is a break in a policy and you need to revive it. If, for instance, you have missed paying your life insurance policy’s premium and the policy has lapsed. Sometimes, the company may ask you to undergo a medical test again when you want to revive the policy. In such cases, you might need an agent’s help.
Online help
Policybazaar offers assistance to customers via phone calls, live chats or emails. These are in the form of helping them understand their insurance needs, the features of the products available, the best options and the documentation.
People might not trust online platforms because of the seeming lack of human interface. This is a perception and is being battled. Insurers are also placing dedicated desks for servicing consumers buying online.
With online retailing of insurance gaining momentum, more and more companies are trying to bring out innovative products. They are attempting to make products consumer-centric and convenient to buy through logistical advances at the back-end, like seamless integration with banks, ironing out underwriting processes and so on.
Segment-specific
Companies are also launching products exclusively for the online space. For instance, Aviva Life Insurance has five products exclusively developed for the online channel, catering to protection, health and investment needs, says Rishi Piparaiya, director, marketing & direct sales.
“The advantage of buying online is increased convenience, lower cost and no middleman involved. The customer can carefully assess his/her needs, compare the products at a comparison website and buy the product. Customers who buy policies online are aware and make need-based purchases; therefore, the persistency rate for policies bought online is much higher than the ones bought offline,”
Saving in cost
There is a massive cost difference for consumers buying insurance policies online and offline. A simple term insurance policy from Aviva bought online for a 29-years-old male non-smoker will cost Rs 6,694. The same policy if bought through offline channels can cost Rs 9,157. Even for the company, online channels are a huge savings, as there are no agents or intermediaries involved. Their cost is the investment made in the online channels and technology. Online policies can be up to 50 per cent cheaper.
So, if you are net-savvy and willing to do a bit of research, there is no reason why you should not buy insurance policies online, with assistance available online, too.
