Home / Money / Personal Finance /  Follow the 5Cs buying model when purchasing life insurance online

The insurance industry has strengthened its digital outreach to remain relevant amid the Covid-19 pandemic. Purchasing a life insurance policy online is easy, quick, safe, and stress-free provided buyers are discerning while choosing a policy.

If you have a basic understanding of the 5Cs while buying life insurance, it will make your life simpler. Let's have a look at the 5Cs.

Comprehensive research: If you are buying a life insurance policy, research is essential. This research should be a mix of both online and offline, as it will bridge gaps in cost-effective options and help you select the best cover. Choosing a life insurance policy with an adequate sum assured is vital. A higher sum insured as per financial need is essential as it increases the amount you have in case of emergency, which truly adds value in safeguarding the financial future of your loved ones. This is where an online calculator becomes convenient to help you compute the coverage amount as per your future goals, lifestyle and other financial requirements

Compare the products: The online world offers a wide variety of options for policy buyers, and, therefore, it is pertinent to compare offerings. Naval Goel, founder and CEO,, said through comparison, a policy applicant becomes aware of the different products available in the market and makes an informed choice by understanding several features, benefits, exclusions and learn about different additional benefits that some policies might offer and some might not offer. "Comparison always helps you properly understand policies specifications and ensures that the person opts for the best-suited policy," said Goel.

Check claim settlement ratio: Claim settlement ratio describes the capability of the insurer to handle the customers' claims. Insurance is a service-based product where the applicant always wants to know the track record of the insurer in servicing clients. It is important to check the claim settlement ratio to ensure that the policyholder or their family doesn't have to rush after the insurance company to seek the promised service during an emergency.

The Insurance Regulatory and Development Authority of India (Irdai) also provides claims-related information on its website. One should check the claim payment ratio of the insurance company to know if the insurance company pays all the benefits as promised.

Choose add-on covers wisely: Always choose a higher cover amount considering the future. The cover amount gets fixed at the time of buying and cannot be changed later. If you feel your cover is insufficient, you can either opt for a new life insurance policy or upgrade the existing one with the help of add-ons.

Aatur Thakkar, co-founder, and director, Alliance Insurance Brokers, said that ideally, the insurance company offers the higher sum assured rebates to the customers. "There are various kinds of add-ons available today offering too many benefits. Some offer coverage against accidental death, disability, and critical illnesses. Some riders wave off premiums if one is unable to pay them due to a specific illness. The choice of a suitable add-on will solely depend on your needs. Iit would be significant for you to first evaluate your existing life insurance cover, risks and financial requirements before opting for an appropriate rider which can add up to the existing policy and offer added benefits," said Thakkar.

Choice of the product should be made sensibly: When buying a life insurance policy online or offline, it is important to disclose all information, including medical history, and lifestyle habits, as this will go a long way to ensure quick claims settlement. It will also ensure your family does not face any issues when filing claims if required.

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