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Problems With Online Term Insurance Plans

Jun 16, 2018 | 2 years ago | Read Time: 2 minutes | By iKnowledge Team

Like everyone else, you may do most things online these days. This is because everything, including term insurance plans, is available at the click of a button. However, there is a lot of skepticism surrounding online plans and the claim process. Most people feel they may face problems at the time of settlement if they buy term plans online.  So, is it true that online term plans are riskier than offline ones? Read on to find out more:

1. Low costs don’t imply a ‘catch’

Since there is a huge difference in costs between online and offline plans, the perception is that there is a ‘catch’ in online plans. This could be because both policies offer the same benefits. However, there is no catch with online policies. The costs are low because there are lower distribution fees involved.

2. There’s no difference between online and offline policies

Most claim rejections happen when the buyer fails to disclose medical history or falsifies claims. The data may carry the information of these falsified claims. Usually, the claim settlement ratio mentioned on insurance websites is a combination of both online and offline plans. There is no real co-relation between claim rejections and online policies. In fact, when someone else fill out forms, they may leave out certain details that may lead to claim rejection later. If you fill the forms giving a detailed disclosure of your personal and family health information and lifestyle habits, you are less likely to face a claim rejection.

3. Online policies offered by new companies are no different

You may be wary of buying online policies from new companies. However, insurance companies are required to maintain a solvency ratio. This is why you don’t have to worry about the company shutting down or your claims being turned down.

4. No change in conditions or benefits of policy

The Insurance Regulatory and Development Authority (IRDA) has set certain guidelines when it comes to claiming settlements. Insurers are given a time frame of about six months to verify and settle any claim made within the first two years. The claim settlement has to take place within the 90-day period for policies older than two years. So, irrespective of whether you buy the policy offline or online, it goes through the same process during claim settlement. There is no compromise in the quality of the term policy just because it is bought online.

5. No differentiation by claims management teams

The claims management teams of insurance companies settle claims, irrespective of the mode of purchase. In case of any clarifications, you can use the helpline of companies for online schemes. You can always coordinate with the insurer’s call center during the claim settlement process to get it done. Agents may claim to do the running around for offline schemes, but you don’t need to run around to start the claim settlement process. 

Just because you purchased your policy online, you won’t face any issues during the claim process. In case your claim gets rejected despite all disclosures, you can contact an insurance ombudsman for justice.

Advt. no.: IA/May 2018/4042


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