Life Insurers Hit Jackpot with Online Term Plans

Sales rise 125% as people find it easier to buy policies on the Internet

The life insurance sector is witnessing a slowdown, but at least one segment of the industry is growing in leaps and bounds. Sales of online term plans are booming, with nearly 55,750 term policies sold in the past six months. 

During 2011-12, roughly 49,500 plans were sold in the entire year and the figure is expected to more than double this year. 
On an average, every five minutes somebody buys an online term plan in India. Insurance portal Policybazaar.com gets almost 2,600 enquiries for term plans every day. The portal has sold about 33,800 online term plans (60% of the total) in the past six months, averaging more than 140 policies per day. 
The average cover is . 72 lakh, which is 35 times larger than the average cover for all insurance policies sold during the past six months. 
Aegon Religare Life, which pioneered the online sale of life insurance nearly two years ago, is the largest player in this segment. It is followed closely by Aviva India. Snapping at their heels is HDFC Life, which launched its Click2Protect plan in January this year. ICICI Prudential Life and Kotak Life are the other active players in this segment. 
While other big players such as Reliance Life and Bajaj Allianz have also jumped onto the bandwagon, LIC has shelved its plans because of its powerful agent lobby. The LIC offering would have been a game changer because a lot of buyers believe that its high claim settlement ratio makes it the most trustworthy insurance company. But the powerful agent lobby forced the LIC to junk the idea.