What you need to know about online insurance and takaful plans?

Insurance companies in Malaysia have recently started offering simple, affordable term insurance and takaful plans directly to the customer. These online or direct term plans have become a regulatory requirement making insurance purchases online easily available now as opposed to the traditional channel of an insurance agent.

From our previous articles, we have established that buying an insurance plan traditionally is not a one-step process. There are many red tapes and requirements needed by the insurance providers upon submission. When buying insurance through an agent, you will need to compile many forms and references. After everything has been compiled, there is a waiting period which will be followed by the verification and approval of the insurance company. Contrasting from traditional insurance, buying insurance online can be a fast and easy option to get protection. However, as is the case with purchasing anything online it is important to read through the terms of coverage provided paying specific attention to the exclusions that apply when buying these plans online.

Apart from being quick and simple, Online insurance has many other benefits. Each benefit may not override the personalisation of an agent, but it would make the purchase experience a breeze. Of course, we need to weight each benefit with a realistic approach and how well it could work with our priorities.

1. Convenience

Convenience is one of the biggest points of difference between making an online insurance purchase and buying a policy through an agent. If you are well versed with online shopping, you know that its convenience and ease come with other drawbacks such as the accuracy of the product and how well it is personalised to you. With insurance being an extremely personalised product, the customer ought to weight how well suited the online product is for them.

2. Cost

Purchasing an insurance policy online saves you several additional charges related to intermediary services such as paperwork, agent commission and distribution. The absence of these extra charges reduces the cost of premium that you pay for your insurance policy.

3. Secure payments

As the insurance industry is highly regulated by the central bank, strict measures to ensure that all payments made online are secure. When you pay for a policy online, your payment passes through a secured payment gateway where the transactions can be easily tracked. Traditionally, buying policies through agents used to have cash in hand transactions which can be easily avoided now with online payments. Although this does not put an advantage in buying insurance online, it serves as a reminder to use secured payment channels even when the policy is purchased from an agent.

4. Avoids chances of fraud

Fraud is a classic example of unethical insurance agents. The ratio of good servicing agent surpasses those we should be wary of. It is also the duty of the customer to wisely choose their agent. Some common fraud related cases are misinforming the customer on the product and company details to push sales. Some of these manipulations are only discovered during the claims process when the customer finds out that the information from the agent and the pay-out from the company is not in sync.

Online policies require you to complete and verify all the details yourself. This makes it hard to get cheated as you must take the responsibility to read through all of the terms and conditions. If you do not have anyone to provide you with information, you are likely to research, educate and compare insurance plans based on your requirements and conveniences. You will not have anyone to misguide you or influence your decision, but you could be left with lots of questions in between the process.

5. Direct interaction with the brand

When you buy your insurance policy online, you are removing the middleman and interacting with the brand directly. Having complete access to the company gives you the opportunity to get first-hand information about the company and its products. On the other hand, working with an insurance agent limits your interaction with the brand directly.  Without the accessibility to the company, details are relying on what your agent says. On the flipside, if you are not very well versed with insurance, you might want to consider having an insurance agent to explain and advise on your policy.

When buying directly from an insurance provider, you also end up with some negatives. You would most likely need to call the insurance or takaful companies call entre to get simple question answered all the way to bigger questions on claims which can be frustrating and could overweigh the whole benefit of convenience that you experience at the point of purchase. In terms of cost savings, we note that the premiums/contributions for many of the plans offered online increase as you get older to the point that it may be too expensive to continue paying for the coverage. You may want to consider the total amount that will be paid online versus a level term assurance plan that you can get through an insurance agent which can provide other additional savings benefits as well.

On the contrary, with an agent, you would have one go-to person who would know you by name when you have questions or claims. An agent has been through the same procedures many times and can help guide you.

If you only have basic insurance knowledge, and if you do not have someone to guide you through and after your online experience, you may end up lost. But then again, if you are well informed and understand how the business works, getting an online plan would be a breeze to you. It truly depends on the individuals’ needs and priorities.

We hope that our unbiased views and tips have been helping you throughout your insurance journey.  To help you navigate through this process, it is always good to work with an insurance or takaful expert to help guide you professionally. We have built a platform to connect customers who are actively seeking insurance/takaful plans with the best agents in their preferred location.

If you are an insurance or takaful agent interested in getting qualified leads from customers who are actively looking for life insurance and takaful coverage, sign up as a GoInsurans Partner for a free trial.

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