Online Life Insurance-Pros and Cons of buying online life insurance

Online Life Insurance-Pros and Cons of buying online life insuranceOnline Life Insurance-Pros and Cons of buying online life insurance

Life insurance is an important aspect in an individual life. A small mistake can move your family into difficult situations in your absence. While offline insurance has been traditionally working well, introduction of online life insurance in the last couple of years is helping several individuals who keep saying they are too busy or they have tight schedule and unable to buy life insurance. In this article, I would discuss about the pros and cons of buying online life insurance and various aspects which needs to be kept in mind before buying such life insurance.

Important points to consider before buying life insurance

1) How much life insurance do you need?

There are several ways in which you can compute how much life insurance you would need.

a) Simple computation: Under this method you would simply consider your annual income and multiply with 8 or 10 times. If you have annualized income of say Rs 5 Lakh, you may require Rs 40 Lakhs or Rs 50 Lakhs of insurance.

b) Expenses method: Here, you would consider the amount of expenses you may require per annum and compute how much you may require to invest to get returns to cover such expenses. E.g. if you have a yearly expenses of Rs 200,000, to earn such amount by depositing in bank account or any other investment option, you may require Rs 22 Lakhs (assuming 9% returns per annum). With such amount you would cover your yearly expenses. You can consider taking Rs 22 lakhs insurance.

Also read: How much insurance do you need?

2) Determine the type of insurance:

Know what type of insurance you may require. While I suggest you to consider taking term insurance which comes with very less cost and high coverage, there are other options like endowment policy or whole life insurance policies where you need to pay good amount for small coverage, but you would get money at frequent intervals or at maturity.

3) Life insurance tenure

Determine up to what age you would require life insurance. The primary objective of taking life insurance is to compensate the loss of income from an earning member. If a person is retired, the earnings are also closed, hence I feel you can consider taking life insurance up to the age of 60 years.

4) Get online quote

There are several websites like etc. which indicates you various online life insurance policy quotes once you provide your age, insurance amount and other details. Compare them and look which one suite you. Don’t just look for low insurance premium. There are several aspects like settlement ratio, reputation of the insurance company which you need to consider before choosing a life insurance policy.

How to buy online life insurance policy

I want to put it in simple words.

  1. Once you have chosen which online life insurance policy you want to buy, visit their website.
  2. Provide your information against the policy online. Some insurance websites asks you to create an account.
  3. Check whether medicals are required or not.
  4. Get quote from the insurance company which may differ due to riders and several other aspects as you fill the form.
  5. You would get an insurance quote to your email ID
  6. Review it and proceed to make online payment. Check terms and conditions carefully before proceeding.
  7. You would get online insurance receipt. Original copy of insurance document would get posted to your postal address specified online.
  8. NRI’s can also buy online life insurance, however certain documentation is required and it would differ from one company to another.

Pros of buying online life insurance:

  1. Fast access to quotes: You would get quick access to the quotes for the online life insurance you are expecting to buy.
  2. Convenience of buying: Individuals need not give any more excuses that they are tied up in meetings or they have tight schedule and unable to buy insurance. You can buy this anytime, anywhere at a click of button.
  3. Lowest prices: Due to competition, several insurance companies like HDFC, ICICI, AEGON Religare etc. are providing online life insurance policies. Due to such competition, the online life insurance comes with low prices comparing to traditional offline life insurance.

You may also like: How to choose Best Term insurance Plans in India

Cons of buying online life insurance

  1. Terms and conditions can be hidden: Individuals may not have time to go through all the terms and conditions. There can be hidden terms and conditions. Call centre person who is calling you from insurance company may or may not explain all such things.
  2. Less interaction with insurance company: In offline life insurance policies you would visit your insurance company. Several things would come up to our mind during the process when we are visiting an insurance company. However it is missing in your online life insurance. It is like you are buying an insurance policy from an unknown.
  3. No Relationship: In offline life insurance policies lot of documentation is required. You would have relationship with your insurance broker and keep visiting your insurance company. You would get clarifications for insurance terms and conditions, implications etc. This is lost in online life insurance.

Conclusion: While there are few drawbacks in online life insurance, I feel you should have thorough review of the life insurance document before buying it online. While insurance company call centre team may call you and explain, but it would be more favoring their product.

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Online Life Insurance-Pros and Cons of buying online life insurance


  • Rohit

    Do they ask every year questions about our health status, as we go to renewal our Term life insurance policy online? For eg. For 4 years i am in good health and on the 5th year i suffer heart attack and survive. As i give this details on renewal, will the insurance companies deny me claim that i have informed them about ill-health? What is the right approach to these issues?


    i am not agree with statement

  • Abhi

    Its suggested to disclose all your health issues and all other details while buying online

  • Vikas

    Hi Suresh Sir,
    Will you plz review LIC JEEVAN ANAND plan?

  • Vasanth

    HI Suresh,

    Thanks for sharing your knowledge on your Blog. It's been good to know about LIC policies

    Can you please help me getting some best Term plan and Health Plans?


    • Vasanth, Please see insurance plans section. I am reviewing one insurance/health plan per week and you would see several articles on this. This would give idea as to which would suit your requirement and you can go for that.

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