Conventionally, Indians have been buying insurance products offline from agents. However, with the increasing usage of internet and e-commerce boom,we also come across numerous insurance companies that have launched their products in the online financial market. Thus,the customer faces a critical question while considering purchase of an insurance plan:
'Whom can I trust for product suitability, price competitiveness, information accuracy and safety - Agent or online site?'
I have done a pointwise analysis below, highlighting the differences between the two modes to assist you in deciding your best suited option.
1. The cost factor
Insurance policies available online are much cheaper compared to the offline variants because the online purchase of plans omit the middleman, thereby reducing operational cost of the insurance company. Thus, the cost benefit is passed on to the customer in terms of lower premiums or higher sum assured.
2. Person versus brand
An offline purchase is usually done through an insurance agent, who is an individual working for a particular company. Thus, there are chances of bias towards sale of plans of his company, misguiding or the agent might go missing thereby adversely affecting service quality. In comparison an online purchase involves dealing with a brand i.e. IRDA licensed fully functional company which could be an insurance company website or a web aggregator. Unlike an agent, a brand is backed by a team of employees working to service the customer continuously. Thus, branded companies have more credibility than individual agents.
3. Independent and Informative comparison
Online purchase of insurance enables a customer to research and do comparative analysis on their own without any persons influence unlike an insurance agent who would favour their company’s product or plan. Online websites offer detailed product information, user friendly financial tools, comparative reviews & blogs etc. That can be analysed by a customer before making a purchase decision.
4. Convenience viz-a-viz comfort
The online mode allows customers to buy insurance plans from the convenience and privacy of their homes. It is the fastest and a secure way of purchase wherein the customer can access the website around the clock from any remote location. However, sometimes people are hesitant in transacting online, especially making payments in spite of declaration of safety of payment gateways. In such cases, they feel secure purchasing a plan through a known agent and rely on his expertise rather than making the purchase on their own.
5. Disclosure of facts
At the time of a purchase of plan through an agent, the application forms are mostly filled by the agent/broker. Under such situation, there have been cases wherein certain details are not filled honestly or certain columns are left blank intentionally or unintentionally which may all lead to claim rejection years later. However, while buying an insurance plan online the customer himself/herself has to fill in all details and give complete disclosures as sought by the insurance company. Any questions left unanswered raises an alert, thereby ensuring that all the required details are filled. Hence, there is no room for ambiguity from the applicant's point of view.
Thus, to conclude, we can say that online mode provides the customer with transparent and unbiased purchase options of insurance plans.