You may tend to lean towards the generic online term insurance comparison charts to let it make a decision for you and your family’s future. Does that mean identifying the right insurance product online is as simple as signing the policy document suggested by your financial advisor. An online term policy of Rs 1 crore for a 30-year-old male with similar features may be offered at a premium ranging between approximately Rs 7,000 to Rs 20,000. Which one would you opt for?
Also Read:Factors affecting your Premium Rates in Term Insurance
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The first instinct would be to go with the lowest premium but is that all that needs to be taken into consideration while identifying the right plan?
Think twice!
There are certain key factors that need to be kept in mind, and with a little online research it should be a breeze.
Policy wordings
When you purchase an insurance policy online, the onus is on you to ensure entire literature is understood thoroughly for various policies of interest to enable you to pick the right product. Reading the policy wordings thoroughly and understanding what’s in store is always an important first step. Typically, the insurance coverage amount and definitive time frame should also be in line with the requirements to fulfil the needs of the dependants in the absence of the earning member.
Filling of online proposal form
While filling up online application form, some information pertaining to the name, age, address, education, employment details, weight, height, previous medical history and the most importantly habits pertaining to consumption of alcohol and tobacco should be transparently disclosed  and aligned as per strictly norms of the company.  This information is used by the insurance company to ascertain if a policy can be issued or not.  It needs to be completed by the proposer, who may seek the assistance of financial advisor to fill it up.
Medical Test
If insurers providing online insurance insist on medical tests which is a good sign. The premium may get marginally expensive on this account but that’s worth it. The tests are conducted at insurer recommended hospitals free of cost and hence significantly reduce the chances of the claim getting rejected in future.
Claim Settlement Ratio
It is the number of claims being settled against the total claims received in a year. Prima facie, the simplest way to choose a policy seems to be to buy one from the company that has the best, or at least very high, claim settlement ratio and ensuring a trouble-free claim processing. However, it may not be entirely correct to go blindly by this data point alone. Some of the new entrants in the insurance industry were initially prompt in settling the claims to establish a good record to capture business.
Financial Strength of Insurance Company
This is one of the major considerations that should to be checked before choosing an online policy. The policy pricing and other points discussed above will not matter if the company is in financial difficulties. For functioning effectively and surviving over a period of time despite heavy claims, a company must have a broad capital base with sound liquidity and reinsurance.
Conclusion
In addition, before you single out the insurer, you can read online reviews and participate in online forums to gain better understanding of the insurance company’s customer service. Identifying the right online insurance product may give a feeling of spending your valuable time but the basic idea of purchasing insurance policy is to provide a financial cover to your loved ones in your absence. Also Read: Why Online Term Insurance Cheap?
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Suresh Kumar Narula

SEBI Investment Advisor, Founder & Principal Financial Planner at Prudent Financial Planners
Suresh K Narula is founder and Principal Financial Planner at Prudent Financial Planners. He has earned the professional CERITIFIED FINANCIAL PLANNER and got registered with SEBI as Investment Advisor. He writes on personal and financial planning articles and got published in Dainik Bhaskar, Business Bhaskar and The Financial Planner's Guild, India. He is also a member of Financial Planner's Guild India ( An association of practicing SEBI registered Investment advisers) to create awareness about Financial Planning in general public, promote professional excellence and ensure high quality practice standards. Suresh received his an M.com from Himachal Pardesh University and an MFC from Punjab University, Chandigarh. He can be reached at info@prudentfp.in
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