Mistakes To Avoid When Buying Life Insurance Online

May 16, 2018 | 6 months ago | Read Time: 3 minutes | By CA Sandeep Vinod Kanoi

Life insurance is intended to offer financial security to your family ones in your absence. Depending on your circumstances, the money could help in paying off debts, funding retirement of your spouse or helping your children’s education. There are several types of policies one could choose from. You could buy insurance online without any hassle just from the comfort of your home. It has become popular in the recent years for a variety of reasons – lower costs, convenience, simplicity, etc. It’s also quicker, less cumbersome, and requires lesser paperwork as compared to traditional method of buying insurance. All you require is an internet connection and familiarity basic with it and you could purchase a life insurance policy online easily. However, there are few things to bear in mind when buying any life insurance online. Hence, be careful to avoid mistakes when you buy a life insurance online.

Here are some of the mistakes which one should avoid when buying life insurance online:

Buying without enough researching

Buyer Beware or Caveat Emptor is something which applies to purchase decisions which include Life Insurance. In simple words, one must be aware of what one is buying. In case you require life insurance, you should know various types of life insurance policies, duration, premium etc. While doing a research, please ensure to keep the following things in your mind:

  1. Purpose of life insurance (managing wealth or retirement, education/marriage of children, etc.);
  2. Type of product – term plan, unit linked plan, traditional plan, group protection plans, etc.;
  3. Claim ratio and experience; affordability – monthly or annual premiums;
  4. Ease of policy servicing

Not comparing rates

Similar to other insurance policies, you would wish to shop around for ensuring that you get the most affordable rates. Buying a new life insurance without comparing the rates of few different insurance companies could cost you a good amount of money unnecessarily. When looking at multiple plans, you would wish to ensure that you provide the exact information to all the insurance portals. You would also wish to review different policies for finding out about major differences in coverage. It helps in ensuring that you get most accurate quotes.

Furnishing inaccurate information

The first step while buying a life insurance policy is to fill up an application form. When filling the application form online, one won’t have an agent to guide you and check the correctness and the accuracy of the details. You need to be very careful and should ensure that all your details are entered accurately and correctly. During the claim settlement, insurance companies could outright reject the claim in case they find that the information provided by you are incorrect, or there has been deliberately misstatement.

It’s very important that you disclose all the facts correctly; failing to do so your dependents would find it difficult in handling claim when such time comes. Furthermore, as it’s an online policy, you won’t even get the support of any agent to fight for your case. Furnishing incorrect or wrong data could be a significant mistake when choosing a life insurance online and must be avoided.

Waiting for too long

It’s always advisable to get a life insurance at the earliest. Premiums would only increase with the passage of time as you get older. Even in case you are in moderately good health, you would still need to pay more annually. Not just that but also you run the risk of serious disease or illness that might result in higher premiums.

Reviewing your policy annually

It is recommended that you review policies once in every 2-3 years to ensure they offer sufficient protection. It is also recommended that you update the beneficiaries in case necessary. Ensure that you review your coverage after every key life events like marriage, having a baby, etc.


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