What to know about online Term Insurance

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Though they have become popular in the past two years, many customers have misconceptions about these insurance plans

1 No difference in client servicing

The online customer receives the same quality of service from the insurance company as any other client. The difference is only in the channel through which the policy has been bought. Agents try and paint a different picture because they lose business when a customer buys directly from the company. When a claim is processed, there is no differentiation between a policy bought online and one purchased through an agent. Besides, all insurance companies have to comply with the rules laid down by the insurance regulator, Irda. If a company is found lacking in service or tries to wriggle out of a commitment, the customer can file a complaint with Irda.

2 Low premiums don't make them unreliable

The low premium rates of online term plans make many people apprehensive. The premium of an online term plan is low because of two basic factors. One, there is no intermediary, so the agent's commission is passed on to the customer. More importantly, the online buyer is perceived as a low-risk customer by insurers. He is educated, earns reasonably well, is concerned about protection and is likely to have health insurance as well. In case of a medical emergency, he may be able to quickly reach a hospital and access specialised medical treatment. All these factors combine to lower the risk and, therefore, reduce the premium.

3 Premium is indicative and can change

The online quote is based on the assumption that you carry the normal risk in terms of health, family's medical history and occupation. When you submit your details and pay the premium, the cover is subject to medical tests. If the tests show that you are suffering from a medical condition or are exposed to a specific risk at work, the premium quoted is likely to rise. If the customer declines to pay the higher premium, his money will be refunded after deducting the expenses incurred on medical check-up.

4 Don't let the policy lapse

If purchasing an online term plan is one of the smartest money moves, the dumbest is to let it lapse. With no agent running after you for the renewal premium, there is a good chance that the customer will forget to renew his insurance. Once the policy lapses, you will have to buy afresh at a much higher premium. Companies offer a grace period of 15-30 days for late payment of premium. Give an ECS mandate to your bank, so that the premium automatically gets paid when it is due. It's a good idea to set an alert in your cell phone or computer.

5 Don't hide facts in the application

If you smoke or chew gutka, your premium will be roughly 25-30% higher than that of a non-smoker, but don't try to hide the fact in your application. If the insurer finds out that a policyholder concealed information that affected the risk to his life, the claim will be rejected. Every year, about 2% of the claims received by life insurance firms end up in the trash can. Your in surance policy is the bulwark of your financial plan. Don't let it be rejected just to save a few hundred rupees as premium.

Happy Investing!!

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Invest in Tax Saving Mutual Funds ( ELSS Mutual Funds ) to upto Rs 1 lakh and Save tax under Section 80C.

Invest Tax Saving Mutual Funds Online

Tax Saving Mutual Funds Online

These links can be used to Purchase Mutual Funds Online that are regular also (Investment, non-tax saving)

Download Tax Saving Mutual Fund Application Forms from all AMCs

Download Tax Saving Mutual Fund Applications

These Application Forms can be used for buying regular mutual funds also

Some of the best Tax Saving Mutual Funds available ( ELSS Mutual Funds )

1. ICICI Prudential Tax Plan Invest Online
2. HDFC TaxSaver Invest Online
3. DSP BlackRock Tax Saver Fund Invest Online
4. Reliance Tax Saver (ELSS) Fund Invest Online
5. Birla Sun Life Tax Relief '96 Invest Online
6. IDFC Tax Advantage (ELSS) Fund Invest Online
7. SBI Magnum Tax Gain Scheme 1993 Invest Online
8. Sundaram Tax Saver Invest Online
9. Edelweiss ELSS Invest Online

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Best Performing Mutual Funds

1. Largecap Funds Invest Online
1. DSP BlackRock Top 100 Fund
2. ICICI Prudential Focused Blue Chip Fund
3. Birla Sun Life Front Line Equity Fund
2. Large and Midcap Funds Invest Online

1. ICICI Prudential Dynamic Plan
2. HDFC Top 200 Fund
3. UTI Dividend Yield Fund
2. Mid and SmallCap Funds Invest Online

1. Reliance Equity Opportunities Fund
2. DSP BlackRock Small & Midcap Fund
3. Sundaram Select Midcap
4. IDFC Premier Equity Fund
3. Small and MicroCap Funds Invest Online

1. DSP BlackRock MicroCap Fund
4. Sector Funds Invest Online

1. Reliance Banking Fund
2. Reliance Banking Fund
5. Tax Saver MutualFunds Invest Online
1. ICICI Prudential Tax Plan
2. HDFC Taxsaver
3. DSP BlackRock Tax Saver Fund
4. Reliance Tax Saver (ELSS) Fund
6. Gold Mutual Funds Invest Online

1. Relaince Gold Savings Fund
2. ICICI Prudential Regular Gold Savings Fund
3. HDFC Gold Fund