Online Vs Offline Health Insurance.docx

here has been a strong emergence of technical development in India in the recent years along with the use of internet as a powerful tool in our day-to-day life. With an increase in internet penetration in India the new generation of working professionals have become increasingly comfortable with transacting online. The insurance industry is very much a part of this ecommerce growth story with a slew of insurance products being sold online. Apart from life insurance whose online term plans are gaining popularity, mediclaim policies are also getting a strong foothold in the online insurance market. With a move over agent oriented sales, all insurers are offering host of their mediclaim policies to be sold online. Thus customers are foregoing their agent’s services to buy online plans. But is it wise to buy mediclaim policy directly online without involving the agent?

The online and offline sales story

Health Insurance Plans are generally sold by agents who represent an insurance company. The agent meets with the clients, understands their financial requirement, explains the features of the mediclaim policy and offers the most suited plan to the customer. In the event of hospitalization, the agent facilitates the settlement process. As such the agent remains the sole point of contact between the customer and the insurer and he gets a percentage of the premium generated by him as a commission. This is a traditional offline sale.

On the contrary, when buying online, the prospective client views the products offered online, selects the most suited plans and makes payment directly to the insurer via the use of credit or debit cards.

So, which one is better?

Online over Offline

The Online Health Insurance Plan has quite a few advantages:

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The best part of buying online is the facility to compare the rates of all the plans available in the market along with their respective features. As such, an informed customer makes the right choice both in terms of the features availed and the premium paid. Thus, online transactions ensure complete transparency in paying the right amount. Also, Online Health Insurance Plans are cheaper compared to offline ones because the agent’s role is eliminated causing the elimination of payment of commission. The insurer also saves on commission and administration costs and thus offers low premium rates to the customers thereby attracting prospective buyers.

Offline over Online

However, the traditional Offline Health Insurance Plan still has quite a few advantages over its online counterpart.

Let me explain it in a little more detail. A Health Insurance Plan can be of 2 types- Cashless Plan or Reimbursement Plan. Under a cashless plan, upon admittance into a network hospital, the insurer directly foots the bills. Under a reimbursement plan, the insured initially pays the bills and later raises a claim with the insurer. Though cashless plans are fairly simple, an agent plays a vital role in a reimbursement plan in raising the claim following the technical procedures.

Investors are generally unaware of the various technicalities of a mediclaim policy and so during claims, the agent’s invaluable service overshadows the meager amount of commission paid at inception. Even under a cashless plan, where it may be argued that an agents role is not required, it can be stated that majority of the buyers are unable to understand their needs and quantify them. Here again, agents, equipped with knowledge and intensive training, help to guide the buyers to choose the optimum amount of cover for themselves and their family.

Who should buy Online Health Plan and who should opt for Offline?

So, to conclude, it is clear that online plans are suitable only if the buyer is completely aware of the finer details of the policy and its working. Not only the buyer, but also his family should know the complete details of the plan bought online because in the event of hospitalization of the insured, the onus of handling the claim process lies with the family members. If one chooses to avoid such hassles, the best option is to compare online and buy offline through an agent who is trustworthy even though the amount of premium would be a bit on the higher side.