Manish Malhotra, a Delhi based advertising executive, always considered life insurance plans as investment tools. But just a chance search for online insurance last month changed the way he looked at it. It was that chance search which made him aware of i-Life, the term plan of Aviva Life Insurance that would provide him a risk cover of Rs. 1 Crore at an annual premium of just Rs. 15,275, for the next 20 years! He went for it without second thoughts.
“There is no better method than going online to buy insurance,” beams this 41 year old father of two sons. “I already have 11 policies and pay Rs. 2.10 Lakh in premiums every year. But all of them together provide a cover of only Rs. 20 Lakh. No agent had told me about this policy from Aviva and I would have never known of it if I had not made that chance search online. And how convenient it was! The whole procedure did not take me more than 20 minutes.”
Online insurance plans have come of age now. For the last two years, they have been the flavor of the season in the industry. One or the other Indian buys an online term plan every 18 minutes. The seven life insurance companies in India that offer these plans, have sold more than 14,500 policies in the last six months, the combined cover being roughly Rs. 9,100 Crore, almost equal to the combined cover of all the policies sold in the year 2010-11 by the five latest entrants in the field of life insurance (Star Union Dai-ichi, India First, Shriram Life, DLF Pramerica, and Sahara Life).
As is well known, India is an under-insured country. But the scene is changing fast. ING Life India, in a survey conducted recently among the middle class people of the metros, found that 85% people feel a greater need to protect their family members from future uncertainties. Yet, the average cover offered by life insurance policies in India in the year 2010-11 was only Rs. 1.93 Lakh. To a large extent, the attitude of insurance agents has also been responsible for this state of affairs. More often than not, they have been presenting insurance policies as lucrative investment options for potential investors, not as a means to protect the family of a common man from future uncertainties.
Online insurance has been instrumental in changing this scenario. The average cover offered by the insurance plans bought online since April 2011, has been to the tune of Rs. 62.5 Lakh. Since May 2011, when it launched its online term insurance plan i-Life, Aviva Life Insurance has sold 4,857 policies, on an average offering a cover of Rs. 75 Lakh. Similarly, Aegon Religare, the pioneer of online term insurance plans, has sold 17,227 policies since November 2009, offering on an average a cover of Rs. 60 Lakh. Taken together, the combined cover of these policies is a whopping Rs. 10,336 Crore, the largest by one company sold through online channel.
The single most important factor in the success of online term insurance has been the absence of agents. This has allowed the buyer the freedom to see life insurance from a different angle. He no longer sees it as an investment tool, but takes it for what it really is – the means to cover risk to life and protect dependents in case of any eventuality. “The customer,” according to Elizabeth Venkatraman, senior vice president of Kotak Mahindra Old Mutural Life Infurance, “is taking a well informed and independent decision now.”
What it tells you
There is no alternative to term insurance in order to protect your family from future uncertainties, and buying insurance online is easily the best and the most preferred method today. So, if you have not already bought a term policy, go for it online now.