Internet Penetration in India stands at 7%, which is not very high but still Life as well as General Insurance Industry has not utilized this mode of distribution of its products. Still they rely of Individual as well as corporate agents to sell their products. Till now, insurance companies mostly allowed to pay the renewal premium online.
Now with the launch of 3G, internet penetration is all set to rise and we have seen in last couple of years that Insurance companies have come up with few products which can be purchased online. In future, we can expect that all insurance companies will be offering Online distribution model, where one can purchase the policy online.
How it Started in Life Insurance
It was Bajaj Allianz which launched I- Gain policy in early 2009 wherein allocation charges were less than 5%, when Industry was charging the same at 50% then. In late 2009, Aegon Religare launched I-Term Plan which was a Pure term insurance product at less than 50% Premium then the cheapest option available in the market.
Later many Companies followed the same Route and Term Insurance, which was neglected market by Life Insurers, it was offered online by ICICI Prudential I-Protect, Metlife Met Protect, Kotak Mahindra E Term and Eterm Preferred plan.
Lately in ULIP space also we have seen Product Like Aegon Religare I Maximize, ICICI Pru Life link Wealth (SP) wherin Charges are very less compared to policies available offline.
Off late HDFC Life has started giving Loyalty Reward on few of its policies that pay back your first annualised premium when you Purchase it Online. Although these policies are also available offline. Just check the screenshot of the website below what it says.
I believe, we can see lot many online products in the future and it would be unavoidable for the companies not to offer their products online. This doesn't mean that offline modes will be discontinued, as already discussed that there are only 7% interenet users in India.
However in the coming time we might see many more online products from various companies will be launched and online mode will be a must if Insurance companies wants to remain competitive in the space.
How it benefits the company
- Online distribution enhances the reach, where person sitting in remote part also can access all the information of the products.
- It Cuts the transaction as well as distribution cost.
- It increases the visibility
- Reaches large mass with minimal cost and time
- Lesser chances of misselling as customer buys himself without any push and going through sales brochure, effecting the company's reputation positively.
How it Benefits you
- No pushy salesman
- Buy at your convenience and ease anytime
- You get to compare it online with other available options in the market
- Lower cost associated with the product since companies saves on distribution costs, which is passed on the the customer. Premiums are upto 50% cheaper than normal Term Plan available in the Market. When it comes to ULIP you will find policies which offer 0% Premium allocation and Topup Premium allocation Charges
- Reviews of policies and service levels of the companies available on various websites and blogs.
- Various users and customers share their experience on various websites which would help in taking the decisions.
- Doorstep services being offered for Cheque pickup/Document pickup/medicals.
- You get all communications on email/SMS which is more faster and reliable than courier or postal service.
Are there any drawbacks
- You have to take all the pain yourself and you might not get the assistance the way you get when you deal with any intermediary/agents.
- Instead of dealing with one person you might have to interact with various customer service officers whenever you call up the call centre. If at all you face any issue you will have to tell the entire story every time you call up the call centre which might be very annoying.
- Your agent who gives you premium reminder and collection service, you might not get that service in the same fashion.
Is it worth taking online policies
Yes, of course. The benefits super-cedes the drawbacks by big margin. If you are net savvy and manage all you finances online, then this incremental work would never be painful. Even if you think that it might be painful, its worth taking the pain once and save year an year. Since online and convenient payment options like ECS(Electronic Clearing Service), SI (Standing Instructions) to pay the renewal premium is there, it would never find it difficult to renew your policy.
Few Insurance Plans which are available online
| Term Insurance | Mode |
| ICICI Prudential I-Protect | Online |
| Aegon Religare I-Term Plan | Online |
| Kotak Mahindra E Term and E Term Preferred | Online |
| Metlife MetProtect | Online |
| Unit Linked Insurance Policies | |
| Aegon Religare I Maximize | Online |
| Bajaj Allianz I Gain III | Online |
| ICICI Pru LifeLink Wealth SP | Online as well as Offline |
| Bajaj Allianz Wealth Insurance | Online as well as offline |
