It's not a sin to buy term life insurance online, but it can certainly be a fallacy if you go about it the wrong way. There are some basic things that you need to know so that you have a smooth transaction.
The first question you must ask yourself is, "Why am I going for an online policy?" Is it because of the convenience? If so, then let me tell you that it is convenient only in the initial stage, where you do not need to move from pillar to post seeking quotes from different companies. Such plans are very good if you want to just sit at your computer and compare quotes. But, there will be a medical examination, which you will have to attend. So, if you are trying to squirm out of the medical, forget it. It is an inevitable requisite for any life insurance policy.
That said, let me tell you about some of the necessary things that need to be kept in mind when you are seeking an online policy.
Some people are skeptical that online providers could be fraudsters and are out there only to make a quick buck. While this is not true in most cases, I would still caution you to be wary of them. All insurance providers-online or offline-need to have the right kind of licenses from the state department. Verify whether the company has a valid license before asking for a quote. Just to be sure, speak with a representative from their office when you zero in on a company. An email correspondence might not be a very good idea if you want to ascertain their genuineness.
Are They Cheap?
People do think that online term plans come cheaper than the traditional ones. While this may be true, you must not expect a huge difference in premiums, as insurance rates are regulated by the state. In fact, if you see an unbelievably cheap quote, you should be doubly cautious and verify that there are no hidden charges or conditions.
One clear advantage of searching online is that you can review multiple companies and ask for a good number of quotes to compare. This would be quite tedious if you were to deploy offline means. In fact, some websites will offer you as many as ten compared quotes. They are nicely tabulated so that even a layman can understand the features easily. You will also get access to a premium calculator that will help you to assess how much cover is needed and how much you would have to pay as premium.
How Precise Are They?
There might be differences in what you find online and what you will have to pay eventually. There's a very simple reason for that-when you ask for a quote, your medical examination has not yet been done. Post the medicals, if you are diagnosed with a condition that is stated in the policy, then the premium may increase. There could be other subtle factors that may increase the final payment. So, be prepared for such variations.
As a final word, go for an online term life insurance only if you are keen to compare all options before going ahead. Even then, you must be ready for unanticipated events, and ensure that the provider is safe to do business with. The best bet is to take the quote online and then visit the office of the company for completing the formalities.
Disclaimer: This article is for reference purposes only and does not directly recommend any specific financial course of action.