As the tax rate changes to 18% from 15% after the implementation of GST, the insurance policy premium rates have marginally increased. Thus the customer is left with no other option than to purchase online, as online policies have always been 30-40 % cheaper than offline options.
According to data shared by policybazaar.com, online term insurance policies cost 40 % cheaper than offline policies after accounting for the higher tax under GST, as there is no intermediary involved and hence the commission is not paid to any agent/broker.
Examples:
For a Rs. 1-crore sum assured, a 35-year-old male (non-smoker) will have to shell out an annual premium of Rs. 39,648 (including GST) under LIC’s Amulya Jeevan 2, which is its offline pure term plan. The same under LIC’s eTerm plan, an online policy, will cost him Rs. 23,430, about 40 % cheaper.
Max Life’s Super Term Plan — an offline policy — for the same sum assured of Rs. 1 crores, for a 35year-old male (non-smoker) will cost Rs. 19,470 now. Max Life’s online plan — Online Term Plan Plus — will cost him a lower Rs. 11,564.
However, for insurers that offer the same term policy both online and offline, the difference in premium is only about 5-6%. For instance, HDFC Life’s Click 2 Protect 3D Plus offline option costs Rs. 14,298. The same policy online will cost Rs. 13,511, about 5 % cheaper.
