Top Reasons To Buy Insurance Online

This revolutionary advantage of being able to buy insurance online is perhaps one of the best gifts on the e-commerce wave that has helped consumers. Here is why:

1. All transactions, application processes, status updates and checks can be done online allowing you to save time and effort that is wasted otherwise if you visit a bank or meet an agent.
2. Online insurance policies are generally quoted at lower premiums against offline ones. This is due to the fact that the insurance company saves money and time on distribution costs, infrastructure and other overheads, hence passing the savings to the policyholder.
3. One of the main attractions of buying insurance online is that the consumer by large learn, research, share and compare all the various insurance companies that are currently in the market. There is no requirement to hurry on a purchase and instead take time to come with a highly informed decision. Individuals can simply browse various online plans, compare features and review crucial parameters to understand the performance of the plan and the insurance company.
4. Buying online allows the consumer to enjoy a high level of flexibility as they themselves are taking control of every aspect of the insurance application, transaction or sustenance process starting from research and shortlisting of potential products to form filling to making premium payments.
5. Most insurance company portals are intuitive and engaging. So people can choose a policy, fill up the application form online, choose supporting documents and submit (upload) them through an easy and secure user interface. This rids people of the hassles of creating document photocopies, seeking certificates or the burdensome couriering of documents.
6. You get access to opinions about products through online reviews, opinions in forums, suggestions and consider various unbiased perspectives about plans and the insurance company you are planning to buy from.
7. Most claims are rejected because incorrect or incomplete details submitted during form filling. Also, in several instances where the insured is not sure about the nature of the policy and the expected returns. You can download and view all the policy features and clauses with just a few clicks online.
8. Since the customer has the freedom from depending on a particular person or agency, there is no uncertainty about your role and responsibility. Paying premiums or updating/ seeking information simply requires a few clicks or a phone call.

Demographic factors such as growing middle class, young insurable population and growing awareness of the need for protection and retirement planning will support the growth of Indian life insurance as well as expanding rise of the Internet is contributing to the industry and it is the perfect time for people to take advantage of the competitive aspects of the industry at this time.

Why should you Buy Insurance Online?

Before getting into the details about the online insurance industry, some of the mind-boggling numbers and facts to note:

• “India's life insurance sector is the biggest in the world with about 360 million policies which are expected to increase at a Compound Annual Growth Rate (CAGR) of 12-15 per cent over the next five years. The insurance industry plans to hike penetration levels to five per cent by 2020”.
• “The country’s insurance market is expected to quadruple in size over the next 10 years from its current size of US$ 60 billion. During this period, the life insurance market is slated to cross US$ 160 billion”.
• “The general insurance business in India is currently at Rs 78,000 crore (US$ 11.7 billion) premium per annum industry and is growing at a healthy rate of 17 per cent.”

This is simply the perspective of the industry and its immense requirement of a faster infrastructure. What could be faster in terms of administering an industry that is so humongous that is efficient as well as cost effective, both to the professionals as well the customers, than the online space?

To be able to pull off an unbeatable large number of consumer base and transactions, the Indian insurance industry has made it very convenient for people to access all sorts of insurance products online. But the question still remains why and how is it beneficial for a civilian singularly to go and buy insurance online and not to go for a more conventional option? Read on to get a clearer perspective on the same.

Why do you need Insurance?

There are a number of reasons why you feel the need of insurance in life. Given that life is full of uncertainties, it’s really important you purchase insurance as early as possible to protect you and your family against all odds. Having an insurance plan not only keeps you protected, it also provides you with mental peace. Insurance is particularly important for senior citizens for whom these insurance policies can serve as a replacement for their income and help support themselves and their family members.

Besides, you can also use these insurance policies to fulfill your investment goals and plan for a cozy retirement. Many insurance policies also offer loan against them which is another advantage you can enjoy by purchasing insurance. Above all, insurance policies will not only take care of you, they will also take care of your near and dear ones by paying for their various needs, even if you are not there.

So, choose your insurance plan carefully, given that a huge number of insurance policies available in the market. Ask yourself the following questions before you actually purchase an insurance plan – “why do you need insurance?”, and “How much do you need?” and “Should you go for term plan or whole life plan?” Once the answers are clear in your mind, choose your insurance policy accordingly.

Types of Insurance in India

• Life Insurance : It is kind of shared bond between an insured individual and an insurance company wherein you pay a certain amount of money as premiums on monthly, yearly or quarterly basis to an insurance company. The insurance company, in return, protects you against future eventualities such as loss or damage done to you, your family members and property. There are different life insurance plans available in India offered by both private and public life insurance companies to help you meet your different financial needs at different junctures of life. The sum assured received from life insurance plans can be used for fulfilling a variety of tasks such security after retirement, protection against health care cost. Life insurance policies not offer risk coverage, you can also borrow money against certain policies. These policies come with a lot of benefits such as death benefits, maturity benefits and tax benefits. Life insurance plans in India normally fall under two major categories namely “Whole Life Insurance Plan” and “Term Life Insurance Plan”.
• Health Insurance : Another type of insurance available in India is Health insurance. It gives you protection you against the medical costs incurred in hospitalization due to illness or accident, nursing care, surgeries, consultation, diagnostic tests, ambulance service, hospital accommodation, medical bills etc. The only thing you have to do to avail these benefits is to purchase a health insurance policy by paying a certain amount of premium to your insurance provider periodically. The insurance provider will take the complete responsibility of protecting you against the cost involved in medical treatment. Certain health insurance policies also pay for regular medical checkups.
• Car Insurance : The idea of purchasing a new car in India isn’t complete without the associative purchase of a good car insurance policy. As the name so aptly implies, car insurance is designed to save the owner of a vehicle from the often exuberant financial liability that is set to occur when his/her cherished vehicle meets with an unfortunate accident or is deemed lost. Accidents come in different forms- both natural and man-made, with a robust car insurance policy providing comprehensive protection against both these unforeseen instances.
• Two Wheeler Insurance : In India, the number of two wheelers massively outnumber four wheelers. Thus, for most Indians, a robust two wheeler insurance policy that protects their bikes or scooters against natural or man-made accidents is an essential investment. Almost all insurers in India offer two wheeler insurance as a priority offering in their arsenal of products with the additional option of specific add-on covers that take into account conditions that aren’t accounted for by the main policy. From theft to major damage in an unfortunate accident, from loss of keys to mechanical on-road issues, everything is taken care of.
• Travel Insurance : Traveling is one of humanity’s greatest passions, and a robust travel insurance policy ensures that travel adventures that have gone out of hand do not claw you back financially. Offering complete protection against such instances as loss of baggage, passport and trip cancellation to major medical issues and unforeseen risks while traveling abroad, a comprehensive travel insurance policy is an eager explorer’s best friend. And, purchasing travel insurance online is a breeze and a contributing factor to its steady popularity.
• Home Insurance : Like they say, ‘home is where the heart is’, which equates to the fact that ensuring the safety of your cherished home ascertains the safety and happiness of you and your loved ones. Home Insurance policies are thus, an important investment. Providing you round the clock protection against financial liabilities arising from damage incurred by your house and/or its contents, a good home insurance policy is the cautious home owner’s best friend. Almost all Indian insurers’ offer this product, and the same can be easily purchased online.

Insurance Risk which can be insured by private companies

1. Large number of similar exposure units: Since insurance operates through pooling resources, the majority of insurance policies are provided for individual members of large classes, allowing insurers to benefit from the law of large numbers in which predicted losses are similar to the actual losses. Exceptions include Lloyd's of London, which is famous for insuring the life or health of actors, sports figures, and other famous individuals. However, all exposures will have particular differences, which may lead to different premium rates.
2. Definite loss: The loss takes place at a known time, in a known place, and from a known cause. The classic example is death of an insured person on a life insurance policy. Fire, automobile accidents, and worker injuries may all easily meet this criterion. Other types of losses may only be definite in theory. Occupational disease, for instance, may involve prolonged exposure to injurious conditions where no specific time, place, or cause is identifiable. Ideally, the time, place, and cause of a loss should be clear enough that a reasonable person, with sufficient information, could objectively verify all three elements.
3. Accidental loss: The event that constitutes the trigger of a claim should be fortuitous, or at least outside the control of the beneficiary of the insurance. The loss should be pure, in the sense that it results from an event for which there is only the opportunity for cost. Events that contain speculative elements such as ordinary business risks or even purchasing a lottery ticket are generally not considered insurable.
4. Large loss: The size of the loss must be meaningful from the perspective of the insured. Insurance premiums need to cover both the expected cost of losses, plus the cost of issuing and administering the policy, adjusting losses, and supplying the capital needed to reasonably assure that the insurer will be able to pay claims. For small losses, these latter costs may be several times the size of the expected cost of losses. There is hardly any point in paying such costs unless the protection offered has real value to a buyer.
5. Affordable premium: If the likelihood of an insured event is so high, or the cost of the event so large, that the resulting premium is large relative to the amount of protection offered, then it is not likely that the insurance will be purchased, even if on offer. Furthermore, as the accounting profession formally recognizes in financial accounting standards, the premium cannot be so large that there is not a reasonable chance of a significant loss to the insurer. If there is no such chance of loss, then the transaction may have the form of insurance, but not the substance (see the U.S. Financial Accounting Standards Board pronouncement number 113: "Accounting and Reporting for Reinsurance of Short-Duration and Long-Duration Contracts").
6. Calculable loss: There are two elements that must be at least estimable, if not formally calculable: the probability of loss, and the attendant cost. Probability of loss is generally an empirical exercise, while cost has more to do with the ability of a reasonable person in possession of a copy of the insurance policy and a proof of loss associated with a claim presented under that policy to make a reasonably definite and objective evaluation of the amount of the loss recoverable as a result of the claim.
7. Limited risk of catastrophically large losses: Insurable losses are ideally independent and non-catastrophic, meaning that the losses do not happen all at once and individual losses are not severe enough to bankrupt the insurer; insurers may prefer to limit their exposure to a loss from a single event to some small portion of their capital base. Capital constrains insurers' ability to sell earthquake insurance as well as wind insurance in hurricane zones. In the United States, flood risk is insured by the federal government. In commercial fire insurance, it is possible to find single properties whose total exposed value is well in excess of any individual insurer's capital constraint. Such properties are generally shared among several insurers, or are insured by a single insurer who syndicates the risk into the reinsurance market.

what is Insurance? what you have to keep in mind?

Insurance is a means of protection from financial loss. It is a form of risk management primarily used to hedge against the risk of a contingent, uncertain loss.

An entity which provides insurance is known as an insurer, insurance company, insurance carrier or underwriter. A person or entity who buys insurance is known as an insured or policyholder. The insurance transaction involves the insured assuming a guaranteed and known relatively small loss in the form of payment to the insurer in exchange for the insurer's promise to compensate the insured in the event of a covered loss. The loss may or may not be financial, but it must be reducible to financial terms, and usually involves something in which the insured has an insurable interest established by ownership, possession, or preexisting relationship.

The insured receives a contract, called the insurance policy, which details the conditions and circumstances under which the insurer will compensate the insured. The amount of money charged by the insurer to the insured for the coverage set forth in the insurance policy is called the premium. If the insured experiences a loss which is potentially covered by the insurance policy, the insured submits a claim to the insurer for processing by a claims adjuster. The insurer may hedge its own risk by taking out reinsurance, whereby another insurance company agrees to carry some of the risk, especially if the risk is too large for the primary insurer to carry.

Modern insurance[edit]

Insurance became far more sophisticated in Enlightenment era Europe, and specialized varieties developed.

Lloyd's Coffee House was the first organized market for marine insurance.

Property insurance as we know it today can be traced to the Great Fire of London, which in 1666 devoured more than 13,000 houses. The devastating effects of the fire converted the development of insurance "from a matter of convenience into one of urgency, a change of opinion reflected in Sir Christopher Wren's inclusion of a site for 'the Insurance Office' in his new plan for London in 1667".^[4] A number of attempted fire insurance schemes came to nothing, but in 1681, economist Nicholas Barbon and eleven associates established the first fire insurance company, the "Insurance Office for Houses", at the back of the Royal Exchange to insure brick and frame homes. The first life insurance policies were taken out in the early 18th century. The first company to offer life insurance was the Amicable Society for a Perpetual Assurance Office, founded in London in 1706 by William Talbot and Sir Thomas Allen.^[7][8] Edward Rowe Mores established the Society for Equitable Assurances on Lives and Survivorship in 1762.

It was the world's first mutual insurer and it pioneered age based premiums based on mortality rate laying "the framework for scientific insurance practice and development" and "the basis of modern life assurance upon which all life assurance schemes were subsequently based".

In the late 19th century, "accident insurance" began to become available.^[10] The first company to offer accident insurance was the Railway Passengers Assurance Company, formed in 1848 in England to insure against the rising number of fatalities on the nascent railway system.

By the late 19th century, governments began to initiate national insurance programs against sickness and old age. Germany built on a tradition of welfare programs in Prussia and Saxony that began as early as in the 1840s. In the 1880s Chancellor Otto von Bismarck introduced old age pensions, accident insurance and medical care that formed the basis for Germany's welfare state.^[11][12] In Britain more extensive legislation was introduced by the Liberal government in the 1911 National Insurance Act. This gave the British working classes the first contributory system of insurance against illness and unemployment.^[13] This system was greatly expanded after the Second World War under the influence of the Beveridge Report, to form the first modern welfare state.^[11][14]

10 Highly Important ‘F’ Terms Used in Insurance

Insurance is a means to protect one from financial loss. However, as simple as the definition is, insurance policy documents are littered with incomprehensible terms that often leave people confused and intimidated. If you are a policyholder or may buy a policy in the near future, it is necessary for you to know very important ten insurance terms.

Face Amount:

The face amount is the amount assured on the face of the insurance policy. This amount is paid when the policy matures or in the event of the unforeseen demise of the policyholder. Additional amounts payable under an accidental demise or any other special provisions are not included in the face amount.

Floaters:

Floaters are insurance plans that are designed to cover your assets and can be moved from one place to another. It offers a cover against both, risks affecting the property at a fixed location and transportation perils.

Fire and Special Perils Policy:

Fire and Special Perils Policy is a contract of insurance that protects the policyholder’s assets against the consequences of the accidental explosion, fire, impulsion, lightening, aerial devices perils, man-made dangers such as strike, riots etc. A Fire and Special Perils plan is a contract where the insurance company assures the policyholder of reimbursement for damages and loss caused to the assets for a certain period of time. Usually, the fire policy is a one-year plan and it requires renewal annually.

First Class Life:

First Class Life is a category that denotes a low risk among the categories of life insurance risk. First Class Life is charged a subsidized premium charge due to its low-risk category. If you are identified as a first-class life, then you’re subject to a reduced premium rate for an insurer.

Free Look Period:

A free look period gives you the option to re-examine the policy’s term and conditions for 15 days from the date the policyholder receives the document of the policy. If you’re not satisfied with the terms and conditions of the policy or if you disagree with them, then you have the option to return it, mentioning the reasons for your objection.

First Unpaid Premium:

First Unpaid Premium is the first time the policyholder defaults on the payments of the premiums. With every premium payment made, you will receive a receipt indicating the upcoming due date of the premium payment. If you skip the payment, this date is recorded as the date of the first unpaid premium.

Funds for Future Appropriation:

Funds from the insured’s accounts, which are not allotted due to delays in the approval etc., are referred to as Funds for Future Appropriation. The undistributed proceeds in the form of profits are similarly set aside for certain purposes. These undistributed proceeds from the accounts of the insured that are yet to be disbursed are known as funds for future appropriation.

Fiduciary:

A fiduciary is an individual holding something in trust for another.

Family Insurance:

A family insurance is a life insurance plan, which provides insurance to all or various members of one’s family within a single contract, usually a whole life insurance for the breadwinner and a small sum of term insurance for children (including the kids born after the issue of the policy) and spouse.

Facultative Reinsurance:

Facultative reinsurance is a kind of reinsurance wherein the reinsurer can either accept or reject any peril or risk presented by an insurance provider looking for reinsurance.

Over to you!

We know that insurance jargon can be confusing for a layman; we have tried to simplify a few insurance terms for you.

If you plan to buy an insurance policy, then you must be aware of the common insurance terms used by your agent, aggregator or your insurer. This know-how of insurance jargon would help you understand your policy documents better and hence may result with you buying a good and profitable policy for yourself.