Home / Money / Personal Finance /  What is better way to buy term insurance, offline or online?

I am 62 and my wife is 60. I want health insurance. Should I buy a family floater or should we buy a policy separately? Also, can my son buy a policy for us? What kind of policy would that be? Will he get tax benefits?

Name withheld on request

 

The advantage of a family floater is that it is generally 10% to 15% cheaper when compared to buying individual policies. You can use these savings to increase the sum assured of the family floater. Chances of both spouses making a claim and exhausting the full sum assured are low. However, if either of you have a chronic medical condition, then it is better to buy individual cover. This would ensure that the underwriting decisions for you would be independent of one another, and in case one person makes a claim, the no-claim bonus of the other person will not be impacted. Your son can be the proposer for your health insurance, where you will be the insured. The product construct will not change. In the proposal form, the relationship between the insured and proposer needs to be declared. Under section 80D, your son will be able to claim a deduction for premiums paid towards your health insurance. The deduction limit allowed for parents is over and above the limit allowed for self, spouse and children. Given your age, your son will be able to claim a deduction of up to 50,000 towards your health insurance premium.

 

I am 35, I want term life insurance. Offline agents are quoting a lesser price than what I am getting online. Should I buy online or offline?

—Nilesh

 

The channel through which you buy, whether online or offline, would not alter the basic product construct. While choosing a channel, you should build your comfort about the following aspects. First, the application process should be transparent and truthful. The intermediary should encourage you to make full disclosures about your medical history and smoking status. Second, the payment should happen directly to the insurer, and not to the intermediary. There have been a few cases reported, even online, where the payment is accepted by an intermediary. This is a strict no. Your rights as an insured get impacted when you pay to the intermediary instead of the insurer. Third, there should be clearly identified processes established with the intermediary to make a claim. For term life, the claim will be made by your family members. So, it is important that the intermediary should be easily accessible to the nominee. Moreover, term insurance is relatively a straightforward product. There are no exclusions in individual term insurance, except suicide in the first year. So, assuming you are fine with the insurer, you can choose to buy offline, if premiums are lower.

Abhishek Bondia is principal officer and managing director, SecureNow.in.

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