For several generations, the Indian population considered insurance as an investment. However, this mindset is slowly changing and several new generation insurance buyers are opting for pure life covers.

The most popular and affordable types of pure life covers are term insurance policies. During recent years, the share of term plans has seen growth. However, penetration is still low when compared to developed economies where term plans comprise almost 50% of the insurance business.

Another change in the insurance industry is that a majority of the new generation buyers are opting for online term insurance plans. A term policy is the simplest kind of insurance coverage and it is quite easy to compare various plans on the Internet.

Understanding term insurance

A traditional endowment plan or a money-back policy provides life cover along with a certain savings component. Therefore, if you survive the policy term, you receive the maturity benefits. In comparison, term plans are pure life insurance covers that do not offer any savings. The benefits are paid to your beneficiaries in case of an unfortunate event during the policy term. However, if you survive the policy term, there are no maturity benefits.

Because term plans are pure life covers, the premiums are lower than the aforementioned insurance policies. A term insurance plan is the most affordable way to procure higher coverage. When you opt to buy the policy online, you enjoy the following benefits:

1. Cost savings

The premium on a term plan depends on your age, gender, and sum assured. Moreover, it also depends on the mode used to purchase the policy. Often, when you opt for an online policy, you may be able to reduce the premium by as much as 25% when compared to an offline plan. The money saved may be invested in other products to yield higher returns over the long-term.

2. Facility to compare and decide

Several online portals offer simple ways to compare different term policies offered by various insurance companies. Additionally, you may use online tools to determine the required sum assured based on factors such as age, income, financial goals, and standard of living.

3. New features

Insurance companies are offering attractive features to encourage new generation insurance buyers. Companies provide an installment-based payout of the benefits in case of an untoward circumstance during the policy term. This means your beneficiaries receive a lump sum during the tragic event and the balance in installments for the remaining policy duration. Several insurers offer increased sum assured at the end of a pre-determined period to align with your changing life goals.

When you are opting to buy an online term insurance policy, ensure you do not focus only on buying a plan at a low premium.  Instead, you must opt for a reliable insurer that provides a policy, which is suitable as per your requirements.

Millicent Grim