Going by the basics we all know that online term plan is always a cheaper option compared to its offline counterpart because of very many reasons, one being that the insurer considers more risk averse so they charge them a low price for the same amount of cover. Other than the low price a online term plan also qualifies for the same type of tax benefit which any offline plan or any form of life insurance plan qualify. You can always get tax exemption under section 80C to a maximum of Rs.1.5 lacs on the premium that you pay towards buying or renewing a term plan and can also get an additional benefits under section 80D to a maximum of Rs.25000 if your term plan has a critical illness add-on against which you have paid an extra premium over and above the premium of your term plan.
The above mention benefits are quite common for any type of online term insurance plan but to buy the best plan that not only fits in your budget but also has the requisite cover that you require you need to consider few critical points which are listed below
A)Insurer’s reputation is very important: This is always an important factor to consider. Insurer’s reputation defines the stability and trust the insurer has. Since the relationship between the insurer and insured is very long term so reputation becomes an important factor to consider.
B)Expenses and cost factors: We should understand the expense structures under a term plan are a critical component under an online term plan. You should know that in a regular term plan if claim doesn’t arise the premium that you have paid over the years goes to waste. The expenses and the cost structures are very important which makes the premium of the cover low. To reduce the cost further you should look for insurers who offer discount premium rates for non smokers.
C)Convenience: Over all sets of protection plans that offered today by insurers term plans have shown the highest level of advancement. You should be able to judge well what you pay against what you are getting. The plan should have a flexibility in terms of pricing which means if you opt for additional cover you pay extra and if your reduce the cover the premium cost should go down accordingly.
D)Claim settlement ratio: This is a critical component while selection online term plan. A claim settlement ratio can be defined as the claim which is settled by the insurer considering 100 claims being made. The real test of insurer insured relationship comes when a claim is raised Higher claim settlement ratio of the insurer is also a measure of the rating of a particular term plan.
E)Riders : Riders are something that can make a plan more robust. Though the policyholder end up paying an extra cost for it but it can help a person to customize the term plan. A plan that offers multiple riders to suit your needs makes it more flexible and effective for a person to look into while buying a policy.
Looking at the long term relationship between you and your insurer under a term insurance policy one should give effective impetus to the above critical factors and should consider them a benchmark to choose or reject a plan of an insurer and not just consider the cost of the premium.