If you’ve never bought insurance online yourself, I guess you’ve at least heard about buying insurance online.
This post is my thought about purchasing insurance online. I’ll cover the pros, the cons, and how I can better improve my buying insurance online experience.
[Disclaimer: I am not a certified financial planner. My sharing is purely based on my own research and personal experience. To make the best financial decision that suits your own needs, you must conduct your own research and seek the advice of a certified financial planner if necessary]
Table of Contents
- The pros of buying insurance online
- The cons of buying insurance online
- Ways to improve buying insurance online experience
- Final thoughts
The pros of buying insurance online
Compared to the conventional way, buying insurance online offers many advantages. Among them:
1. Cheaper premium
Getting insurance coverage online offers a much cheaper premium. The below could be the reason for the lower premium:
- they don’t have to pay commissions to intermediaries such as agents.
- less operational cost for managing the agencies.
- minimal staff and operational costs required.
From my husband’s experience of renewing my car insurance online, we managed to save about RM100 compared to the conventional way.
2. A more informed decision made by oneself
Buying insurance online means I need to get it done myself such as reading, understanding, asking for quotations, and completing online registration forms. Along the way, I learned new things such as insurance terminology and how it can affect my insurance policy.
This resulted in a more informed decision made by myself.
3. Convenience
Another advantage of buying insurance online is that it is super convenient. I can do it anytime, anywhere on my own, as long as my device is connected to the Internet.
Recently, I was looking for child health insurance for my son. As a stay-at-home mum to my active toddler, my personal time starts when my son is asleep. Usually, it is around 10 pm. Via online, I can explore, gather the quotation and do the comparison at midnight or during weekends.
And I found it really helpful when some of the insurance providers offer an instant quotation for health coverage. This means I key in the information on my own. Within a few seconds, the quotation is right on my screen.
From there, I can read and study the quotation. If I wish to change the coverage, I can just go back to the quotation and enter my new desired coverage amount. Within a few seconds, a new quotation is generated.
So, I don’t have to request through an insurance agent and wait for him or her to send me the quotations.
4. No pressure for a decision
Next, since I don’t deal with an insurance agent, no one is going to pressure me to quick-quick make a decision.
This also means:
- I don’t have to find excuses if I need more time to consider a plan after getting the quotation.
- I don’t have to feel bad if I didn’t sign-up after getting the quotation.
In other words, I can take my sweet time studying and evaluating quotations.
5. A better deal with multiple quotations
Via online, I can easily generate multiple insurance quotations either from the same provider or a different provider. I can have a few quotations in a short time frame.
Then, I can start comparing.
Unlike the conventional way, where I need to get the quotations through agents or a third party. Usually, they require some time before can send me the quotations. If I wish to have 4 quotations from different providers, this means I need to contact 4 different agents and wait for these agents to send me their proposals.
Most probably, I won’t waste time and effort on too many quotations via the conventional way. But, online, I don’t mind looking around for a better deal.
The cons of buying insurance online
Despite so many advantages of getting coverage through the digital way, there are also some disadvantages as below:
1. No dedicated insurance agent to serve
To a certain extent, no insurance agent involvement can be a great disadvantage. Because I’ll need to do the following by myself:
- find the right coverage.
- read and learn all the hard-to-understand insurance terms.
- in case of anything, submit the claim myself.
It can be time-consuming to read the policy and its details by oneself. I do agree that a professional and reliable agent can make the process much smoother.
Personally, I think certain insurance such as car insurance or standalone coverage is ok to proceed without an agent. While a more complicated policy such as an investment-linked plan still requires some level of assistance from an insurance agent.
3. Delayed in making the decision
Another possible disadvantage of enrolling for an insurance plan online is delayed decision-making.
Why did I say so? These are the reasons:
- more time is needed to explore, read and digest the proposals, especially on insurance terminology.
- the time required to compare the proposals.
- no follow-ups from insurance agents mean the buying process could be delayed.
Based on my personal experience, I spent quite a lot of time researching medical coverage for my son before I finally signed up for a plan.
3. Payment via online banking or credit card
Similar to other online shopping, the payment mode when buying insurance online is also online. That is either through online transfer or credit cards.
The problem is, not everyone has online banking facilities.
Although most of us have these facilities or hold credit cards, some still prefer to pay by cash.
4. Limited plans available
As of the time of writing, not all insurance plans are available via online distribution.
For example, for investment-linked plans, the insurance provider still directs me to their agents or wealth planner.
5. Possibility of under-insured
When purchasing insurance online, there could be a possibility of being underinsured. This means the coverage amount might be not sufficient in case of an unfortunate event.
6. System down
As with all other things related to the digital world, when the system is down, I can’t do anything.
But, I believe insurance providers are trying their best to avoid system problems. If it happens, they’ll minimize the downtime.
7. Doubtful due to new technology
Unfamiliar first-time users may be feeling doubtful about sign-up important matters such as buying insurance online. With most of the confirmation done through emails and other digital ways, first-time users might ask “Can I really trust that I am covered?”.
Because there are people who only feel secure when:
- they talk to a representative from the company.
- they receive a hard copy of the document (policy).
But this usually only happens during the initial part.
Ways to improve buying insurance online experience
Below, I compile a list of ways to improve buying insurance experience:
1. Equip me with insurance knowledge
Knowledge is power. Therefore, before I started asking for quotations, I read and learned as much as possible about insurance matters.
With this knowledge, I am more aware of things such as the right coverage and other important things to take note of.
2. Know what I want
Since there’s no agent involved, I need to know the type and amount of coverage that best suit my needs and situation. This is the reason why I need to equip myself with insurance knowledge.
When I know what I want, it makes the whole process easier and smoother.
3. Avoid too many quotations
From my readings, I learned that the majority of the offers are quite similar. So, I go for the main reputable providers that provide efficient services.
With this, I don’t have to waste too much time comparing quotations.
4. Set a target date for signing up
Setting a target date to buy insurance is important. Without follow-up calls or SMSes from the insurance agent, it is easy to forget about completing the buying insurance process.
Final thoughts
Buying insurance online is getting more popular. I do agree when industry experts said digital insurance is the future. As a consumer, I am glad I have more options when looking for insurance coverage.
Although there are many advantages of buying insurance online, it is worth taking note of the disadvantages as well.
Personally, I think the most important part is to understand what I am buying.
Do you have experience with buying insurance online? Feel free to drop your comment below.
Image Credits
Image by fancycrave1 from Pixabay
Great sharing!