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What Makes an Online Term Plan So Cheap?

By Deepak Yohannan

What Makes an Online Term Plan So Cheap?
At a time when even the daily grocery is bought over the internet, people do not hesitate to buy insurance policies online. Think about it. While buying an offline policy, you need to travel to the insurer's office (or wait for the agent to come over), go through a whole lot of paperwork, devote a considerable amount of time and then pay for the services rendered to you. On the other hand, you can simply sit in front of your computer, fill in your details and click your way to a new insurance policy. So obviously, you would be tempted to buy the policy online. It is this very reason that has made the online term plan insurance policies so popular today. And since they are available at discounted rates too, more and more people are opting for them.

Factors that make the online term plans cheaper than the offline plans:


1. No agents - Insurance policies and insurance agents have shared a long-lasting bond. Even a few years ago, very few people could imagine buying an insurance plan without going through an agent. The agents usually charge a fee and this adds up and makes the plan more expensive. Every time you pay your premium, you pay an extra amount to the agent too. However, in the online term plans, the agent is completely excluded. You buy the policy directly from the insurance company and so save a large chunk of money. This is the biggest factor that makes the online term plans cheaper than the offline term plans.

2. Room for comparisons - This may sound very elementary, but a lot of times the investors benefit from comparing term plans online before making a purchase. Insurance agents do not always provide you with all the available options and you end up making a purchase without verifying if there was a cheaper alternative available. But when buying an online term plan, you can actually see all the policies available and make an intelligent choice, thereby saving a lot of money. This is another factor that makes online term plans cheaper.

3. Competition - Since online term plans are rapidly growing in popularity, more and more insurance companies are launching products at discounted rates, just to stay ahead in the race. As a result, the customers are benefitting immensely. For instance, Aegon Religare launched the iTerm Plan which offered an assured sum of Rs 50 lac for Rs 5350 of premium paid annually. This was soon followed by the Met Protect Plan launched by Metlife and the i-Life Plan launched by Aviva Life Insurance which offered a minimum cover of Rs 35 lac for Rs 4046 of premium paid annually.
So if you are looking to buy a term plan, you may consider an online term plan. These plans are much cheaper than the offline plans. However, there are many clauses and conditions included in these terms and you must be very careful before finalizing any agreement. Do not blindly opt for the cheapest policies. Compare the various policies and see which suits you the best. This will help you in getting claims faster and in a more convenient manner.


For more articles by Deepak Yohannan, please visit

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