Home  My Blog What I think about Online Insurance Purchase
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What I think about Online Insurance Purchase |
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Written by Wilfred Ling
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Sunday, 18 May 2008 |
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I think this is a great idea but when come to execution it is going to have problems.
For simple insurance products, I think it is beneficial for a person to buy online. The problem is that I’ve not seen a simple insurance product. Take travel insurance for example, I always ask my clients to buy online rather than through me because it is so cheap. Recently I bought a travel insurance online for my entire family of 4 persons for a 5-day holiday trip for just $45. Goodness so cheap. But when I receive the policy document, it contains significant fine prints that are really scary. It looks to me that the fine prints are no shorter than other life insurance policies like wholelife or term insurance. How about coverage with regard to pre-existing congenital issue? One insurer covers congential without waiting period for its wholelife. Another covers with a waiting period of first 7 years from the birth of the life assured. And another completely excludes congential diseases. Who will ever know what cover and what does not cover if a person purchase online? What in the world is congential disease – a layperson is unlikely to understand. Last year I met a person who bought a term insurance online. When I met him for a life insurance planning, I discovered that he did not add a special waiver. I asked him why he didn’t buy that special waiver when it is so cheap? Apparently he didn’t know what is a special waiver. Aiyo, how come like this? I suspect that the special waiver was not available as an option if purchase online. Anyway it does not matter because he did not even know the existence of such waiver. How about disability income insurance? Wah, this kind of insurance definitely cannot sell online. It is too complex and the explanation of what is it will be too difficult to comprehend for a person to go and buy online. How about shield product? I was at an insurer office two months ago to collect a cheque for my client’s hospital claim. As I was sitting there I just observe one walk-in client. He already had a shield proposal form but he did not understand some parts of it. So he tried to ask the staff and spend quite a long time on it. I think the insurer need to have a well qualified and train call-center to handle enquiry if it is to sell insurance online. My problem is that (1) Adding full time staff to handle enquiries – especially if it is going to be lengthly and complex questions is going to increase the insurer cost. Online purchase means no asking of question. (2) Insurance purchase comes with underwriting. With no personalized agent to help in getting the underwriting done properly like medical follow-up, I think the client is going to be quite frustrated. For example, recently I have a client with high blood pressure (actually this quite common). I could tell the client what to expect and therefore manage his expectation as far as underwriting is concerned. Sometime exclusions and loading can be negotiated too. For example, last year I handled a case in which a young lady had a high loading because of a breast lump. I sought the underwriter help to consider another alternative choice. The underwriter offered an alternative which was with no loading but an exclusion. From this it can be seen that underwriting outcome can be negotiated. Sometime underwriting outcome can also be influence by new medical information which an experience adviser can tell the client to obtain so as to improve the chances of favorable underwriting. I seriously doubt anyone going for online purchase for insurance can be advised in this way. |
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