Online term insurance plans are flooding the market, with four insurance companies launching these plans in the last few months.

According to company officials, selling term plans online eliminates the cost of the intermediaries and makes the product cheaper. Insurance companies are targeting people in the age group of 25-45 who are Internet-savvy and comfortable buying policies online.

While Aegon Religare was the first to launch an online term plan, when it came out with a pure-term plan called ‘iTerm' in October last year, other companies such as ICICI Prudential Life Insurance, Metlife Insurance, Kotak Life Insurance and Future Generali Life Insurance launched these plans recently.

Future Generali launched an online term plan called ‘Smart Life' this week for sum assured between Rs 10 lakh and Rs 50 lakh.

“For the same sum assured, online term plans will work out cheaper. Term plans sold online are at least 10 per cent cheaper than those sold through intermediaries,” said Mr Andrew Cartwright, the appointed actuary of Kotak Life Insurance.

Companies do not have to pay commission to agents and distributors. In addition, they save on expenses such as branch costs, he added.

Kotak Life has launched two online term plans – e-term for sum assured between Rs 3 lakh and Rs 25 lakh and e-preferred for sum assured above Rs 25 lakh.

According to Mr Cartwright, the launch of a term plan online will not upset agents and other distributors. “Not many people buy term insurance plans because the intermediaries do not want to sell it,” he said.

Mr Deepak Sood, Managing Director and CEO of Future Generali India Life Insurance, said the company will target young, technology-savvy customers who are accustomed to purchasing products online.

Considering that more players are offering term plans online, Aegon Religare is plans to sweeten its offerings.

“We are planning to make some changes on the pricing front as well as introducing riders such as critical illness and accidental benefits. However, we will make changes only in the next quarter after looking at the products of other companies,” said Mr Rajesh Rajput, Director, Product Development and Pricing, Aegon Religare.

Source : The Hindu Business Line