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4 Common Problems in Buying Online Term Insurance:
The major benefit of purchasing an online term plan is that these plans are available at a very cheap price compared to the offline term plan. The premiums you pay are very less for a reason. There is no intermediary (no life insurance agent to persuade you to buy the online plan). This means the life insurer saves on the commissions and the salary of the life insurance agent .This savings in cost is transferred to you through a lower premium.
But this saving comes at a price.
You have to do all the research about the online term life plan yourself. There is no life insurance agent to advise you on the shortcomings of the online term plan. Nobody to advise you on the options under the online term plan. You have to collect and present all the necessary documents required for the online term policy to the life insurer.
Your claim process might be quite a hassle. On your (policy holders) death your family might not get the services of a life insurance agent to help with the claims.
You must opt for an online term insurance plan only if you are confident of your research abilities (You are well qualified and know all about term life insurance).
1. What about rider benefits in an online term plan?
Rider benefits are additional benefits provided with a term insurance plan .You have to pay a higher premium for this. This could be the critical illness rider (pays you a lump sum if you suffer a critical illness such as a heart attack or a stroke) or an accident benefit rider which pays your nominee an extra sum if you (policyholder) die in an accident. You don’t get rider benefits in an online term insurance plan.
2. Online term plans might be subject to scams:
You have heard of online scams which take place in all sectors. In spite of online/net banking being highly secure, scams are known to take place. The Insurance sector is also affected by these online scams and you need to be careful when paying your premium and taking up these plans. Check the “url” of the website and do not transact on the website if it begins with “http” instead of “https”.
3. You might also encounter the general problems faced by all online plans:
Your credit/debit card might be billed, but the money (premium) has not reached the life insurer. Your credit/debit card might be billed twice. (You pay premiums two times for the online term plan.)
These problems can be solved by showing the bank statements to your life insurer. If you are unlucky you would have to face these difficulties/hassles while purchasing the online term insurance plan.
4. There is no acknowledgement from the life insurer:
You have paid your premiums for the online term plan but your life insurer has not contacted you or acknowledged the payments. You should receive the policy documents within 15 days of applying /availing the online term insurance plan.
You need to intimate (contact the life insurer) and if a Company representative does not get in touch with you or you are subject to delaying tactics then you should consider your legal options. You need to check your suitability to the online term insurance plan before you buy it.
You need to intimate (contact the life insurer) and if a Company representative does not get in touch with you or you are subject to delaying tactics then you should consider your legal options. You need to check your suitability to the online term insurance plan before you buy it.
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