Smart things to know about online term insurance policies

1) Insurance companies offer the facility of buying term insurance online. These policies may be the same as those sold through distributors or could be for exclusive online sale.

2) The applicant must begin by choosing the cover and policy term. The applicable premium is computed and disclosed on the basis of age, gender, and the chosen policy term and cover.

3) Online term plans offer the benefit of lower premium rates than those for offline policies since the distribution costs—paid from the premium of policies distributed through agents—are saved.

4) Online term policies may not require a health or medical check-up for certain age groups, specific customer profiles (non-smokers, non-tobacco users) or those considered below the threshold risk as decided by the insurer.

5) The individuals who are eligible for non-medical processing make the standard premium payment and get the cover immediately. The free look-in period is available for online policies too.

6) In other cases, a medical test may be required, and depending on the results, the premium payable may have to be increased, which would be over and above the standard premium disclosed initially.

The content on this page is courtesy Centre for Investment Education and Learning (CIEL). Contributions by Sunita Abraham, Girija Gadre and Arti Bhargava.