Should I Opt for a Life Insurance Policy Online or through an Agent?

Online life insurance policies are ones, which may be purchased directly from the insurance company through the Internet, without any involvement of an agent. In a recent industry move, the Insurance Regulatory Development Authority (IRDA) directed insurers to cut down the commission given to agents, which has led to the augmentation of such online policies.

To get an online life insurance policy, a buyer has to first select the policy that fits his demand and budget. Independent insurance portals can be useful to compare policy type, term length and coverage amount of peer companies. Online quotes may be requested, too. Then, the buyer has to fill in the requisite details in the application form, and submit it along with relevant documents like photo IDproof, income statements, etc. to the company. If required, the policy applicant might be asked to get a medical examination conducted.

A life insurance agent, too, may provide valuable assistance by helping the customer understand life insurance and helping him purchase a plan that fits his needs.

Benefits Offered by Agents

• An agent makes sure that theapplication form is duly filled and that nothing on the application jeopardizes the customer’s coverage.

• He helps the customer select a financially sound company.

• If a customer has health, weight, or other problems that might make him ineligible for the usual insurance policies on offer, an experienced agent can help him locate an alternative policy.

Benefits of Online Life Insurance

• For customers, the benefits include low premiums, quick and easy processes and 24*7 service. Besides, they save the amount that would otherwise be given to agents as fees and also have the facility to make informed decisions, unbiased by the agent’s opinion.

• For the insurance company, online life insurance proves to be a low cost-alternative with reduced distribution costs. They also save on agent commissions. Besides, online solutions would have to simple and clear for the customers to understand, hence reducing the chances of ambiguity.

According to industry experts, an online life insurance policy may cost a third of a similar policy bought with the help of agents or through an insurance company’s office. Yet, if a customer would like expert advice, he can get it through online insurance brokerages. Whether or not he opts for an agent, a customer is advised to review financial ratings offered by credit agencies like S&P, Moody’s, AM Best, etc., of the companies he is considering, in order to make the best choice.