Ch. 15: Where to Buy Whole Life Insurance?

Buying things online has become simple, almost a reflex, with new technologies and smoother interfaces. You can sort items using filters and complete the entire purchase with just a few taps and clicks. Everything, from retail to grocery to even telehealth services, is seen in the online realm.

What happens when it comes to insurance? You will have a plethora of options where you can purchase the policy from. Should you buy it directly from the insurer’s website? Or should you opt for an aggregator website, where you can see and compare multiple plans? Or should you choose the offline path and rely on a financial advisor? Or is a bank better? An insurance policy, more so a Whole Life Policy, has consequential implications on both your and your family’s future - and it is extremely important to weigh all the pros and cons of each option before deciding one - to save yourself and your family from any inconveniences after you’ve purchased the policy.

While Whole Life Plans are majorly sold offline via financial advisors, Whole Life Insurance Plans can be purchased from the following channels too:

• Online from any life insurance company’s official website
• Online insurance aggregator or broker
• Banks

The Pros, and the Cons

Let’s discuss each option in-depth so you can be aware of the nitty-gritty details and make an informed choice.

Buying insurance online is quick and simple - you can purchase a plan within mere minutes from the comfort of your home. Most insurance companies allow you to make your purchase through their online portal. Submission of the form, documentation, etc. happens on their portal itself. Plus, buying directly from the insurer will ensure that you’re getting first-hand information about the plan you’re thinking of purchasing.

The pros -

• When you purchase a policy online through an insurer’s website, you are most likely to get the best offer on premium amounts. There are insurers who offer discounts on premiums when you buy directly from them
• The experience may be smoother, as you are dealing directly with the insurer and not from a third party.
• The latest products may be available first with the insurer, before they are distributed through other intermediaries.

The cons -

• You won’t be able to compare products across different companies over one screen. You’ll have to manually scan through various websites, make notes and then compare.

Aggregator websites make your job of comparing policies easy, as they have multiple products across different brands lined up on the same page - you can compare these and choose the plan that you feel is the best fit for you. There are around 20 aggregators in India right now.

The pros -

• Aggregator websites will have a streamlined website for comparing plans and customer service. You can compare plans from different companies on the same portal.
• Aggregators and their support may be able to provide assistance across plans and insurance companies unlike other intermediaries that may serve limited plans.

The cons -

• Many aggregators could be focused on sales and distribution and may not be good at claims management for their customers like probably a good financial advisor. You need to check the claims track record of the aggregator well before you decide where to buy.

With the increasing demand of insurance, banks have started selling and diversifying insurance products, including whole life insurance plans.

The pros -

• Since you will already have an existing banking relation, you will be dealing with the same bank representative for another product.
• A number of banks have started amping up and improving the tech side of things, to make your insurance journey hassle-free.
• The documentation process becomes simpler. The bank already possesses a number of your documents, which will be used during insurance purchase. For example - Aadhar card, etc.

The cons -

• As per IRDAI regulations, each bank is allowed to sell only one insurance company’s policy in Life, Non-Life & Health Insurance categories. You might not have a lot of variety or scope for comparison.
• Banks are like a supermarket of multiple financial products, but they usually aren’t able to provide support over claims. They might redirect customers to the insurer’s infrastructure when it comes to claims.

Finally, you also have the option of buying your policy offline from a financial advisor.

The pros -

• A good financial advisor can manage everything for you - they will help you during the purchase, visit the branch office, bring you the form to be filled, gather the documentation at your end and submit them, and also follow up with the insurer on your behalf so your policy gets issued on time.
• Since there is a personal touch involved, they will be able to understand and anticipate your needs and requirements.
• Their business relies on their goodwill and reputation, which is why you can expect end-to-end and efficient assistance from them.
• They can act as the single point of contact between you and the insurance company and follow up on your behalf to get the claim approved.

The cons -

• You need to be careful when choosing a financial advisor for your insurance needs. There can be advisors who may be focused only on incentives and hence mis-sell, while there could be others who would want to build their business based on their long term reputation and hence provide you flawless advice and lifelong service. It’s important to find out more about the track record of financial advisors before you buy from them.
• As per IRDAI norms, an agent can sell insurance from only one insurer each in Life, Non-life, and Health insurance categories. Your options will, therefore, be limited.

Now that you are well aware of the pros and cons that come with each option, make sure you assess each one of them closely and carefully - depending on what is convenient and correct for you. Insurance is a long term commitment and can span many years, and you certainly don’t want to make it a bother for your family and yourself.