This is surprisingly true for online term plans. They have lower premiums than term plans sold through advisors since life insurance companies pass on the savings in their cost of selling.
Consequently, low premium ends up being a major draw for buyers of online term plans, since they often end up being the lowest premium life insurance plans on offer. However, when buying an online term plan, you need to look beyond low premiums.
Check about the company’s presence While buying an online term plan, find out about online and physical presence of the life insurance company. Since you will not have an advisor’s help, you need a company with a responsive online presence. Similarly, you will need a branch office in your city, ideally, near your home.
Inquire about the company’s track record Life insurance plans involve long term relationships of over 20-30 years with the life insurance companies. Therefore, your life insurance company needs to be trustworthy.
Find out how long the company has been in business and the promoters involved.
Also, find out how well the company has been serving its customers with the help of an important statistic—claims settlement ratio.
This is the proportion of life insurance claims settled to the total number of claims made. Higher the figure, say 90% or more, the better it is.
Availability of riders Other than risks to your life, you face other risks such as those from accident, disability, critical and other illnesses like heart diseases and cancer. Life insurance riders cover many of these risks at a low cost and can be attached to a term plan. Find out whether the life insurance company offers the riders you seek.
Flexibility of benefit payment You need to ensure that the life insurance company settles claims quickly and the life insurance money comes to your family in the form it needs. This means if the family needs the money to come in the form of a lump sum, regular payments or a mix of regular payment and lump sum, the life insurance company should be able to provide it.
Evidently, there is more to buying online term plans than just grabbing the lowest premium plan. But since the effort is for your family, it is truly worth it.
Key Message
When buying an online term plan, besides premiums, look for the life insurance company’s online and physical presence, availability of rider, flexibility of benefit payment and claims settlement track record.
