Insurance agents try to capitalise on tax-saving season to promote insurance products. More often, insurance is sold as an investment product in India. Going one step ahead, some insurance agents have sold their clients multiple policies with different maturities collectively labeling it as a customised pension plan. But as awareness grew, people became aware of these infamous tricks of insurance agents. To make insurance more a "buy" product and bring in more transparency; Insurance regulatory and Development Authority of India (IRDA) issued new guidelines. Unit Linked Insurance Plans (ULIPs) which was considered a "hot" product a few years ago has all of a sudden become unattractive under new rule. As a result, agents too started promoting more and more traditional plans. According to the annual report of IRDA about 2.36 lakh insurance agents exited in 2012-13. With falling commissions many agents have found it unattractive to do business, especially the part timers.

To eliminate intermediaries, many people prefer buying insurance online these days. As reported by one of the reputed daily new papers, there have been more than 27,000 searches made in a month using keyword "insurance". This suggests that awareness in insurance is growing.

PersonalFN is of the view that, although buying insurance online is convenient; you must buy a product which is suitable to you the most. One must understand one’s own insurance requirements before finalizing the product. There are various approaches to arrive at the insurance needs and your financial planner may help you arrive at the sum you need get yourself insured for. Term insurance provides your cover purely against risks and has no investment element. Content available online is not always authentic. There is another interesting finding that, although people search online not all of them comfortable buying online that is why they still prefer to buy through agents.

Things that do not change whether you buy insurance online / offline
There are certain things which do not change irrespective whether you are buying insurance online or offline that include disclosing all the facts such as your health history, family health history, smoking habits, occupational details and any other facts which could lead to rejection of the claim in the future. Moreover, basic principles of insurance contract remain the same whether you buy online or offline. Same set of medical tests would be performed, wherever needed, in both cases.

How to shortlist insurer?
Promoter's Background: Remember, the insurer indemnifies you against the risk, which you face, and hence assessing the promoter's background and their philosophy becomes very crucial.

Number of years of existence: Well, it is always said that experience counts and in our opinion too it does! It would be prudent to go with season players (insurers) rather than the one who are relatively new entrants in the business of insurance.

Financial Background: A well-established insurance company with a proven track record is in a better position to give you that extra bit of peace of mind.

Claim Settlement Ratio (CSR): CSR will help you assess the percentage of claims settled, against the total claims lodged with the insurer.

Solvency Ratio: This ratio reveals the strength in the balance sheet of the insurance company and the capability of the insurance company to settle insurance claims. It takes into account the net worth and the reserves and surplus held by the insurer.

Advantages and disadvantages of buying insurance online
 

• Absence of intermediaries and benefit of reduction in policy administration costs helps lower the premium
   
• Although premium is low, services provided by the insurance companies remain same for both offline and online customers.
   
• The disadvantages include no support of agent. You will have to set your own alert for paying premium in time. There wouldn’t be any helping hand at the time of filling claim
   

PersonalFN believes that growing awareness about insurance is good news. But buying an insurance policy through an agent or buying it directly online; you must be careful and shouldn’t forget that insurance is a contract between you and the insurance company that comes with "terms and Conditions". Reading the Devil in the fine print is important.

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