For the first time ever, Life Insurance Corporation of India (LIC), will sell insurance policy online. The country’s oldest insurer will be launching a pure term plan that customers can buy online as well as from an insurance agent.
LIC term insurance plans are priced comparatively higher than the online term plans of private insurance companies. Here’s a comparison of term plan rates of LIC Amulya Jeevan and rates offered by some private players on online term plans.
Male, non-smoker, age-30 years, term cover-Rs 30 lakhs, policy term-20 years.
Online term plans are cheaper than offline term plans. The reason for this is that in an online term plan, companies save on various costs, which they are able to pass on to their customers. There are no agents involved while selling an online term plan, which means there are no agent commissions to be paid out.
Commenting on the plans to launch a pure term product, S Roy Chowdhury, Executive Director – Marketing of LIC, said, "We are in the process of designing a pure term product which would be sold through both online and through agents. The rates will be lower than what is charged at the moment."
Term insurance plans give the highest form of protection for a small premium. The benefit is paid out to the nominee if the insured member dies within the policy period. The premium rate is fixed at the time of taking the policy and has a direct co-relation with the age of the insured along with certain other factors like gender, smoking habits etc. If the insured member survives the term of the policy, then the policy lapses and no benefit is paid out.
Internet savvy customers prefer buying a term plan online as it helps them save money on premiums. The only problem is that out of the 23 life insurance companies in India, only a handful of them offer online term plans.