Life insurance: Spare yourself tedious paperwork, here’s how to buy policies via OTP

By: | Published: January 10, 2017 6:12 AM

MANY income tax payers tend to hurriedly pick up financial products to save taxes. Insurance plays a big part in this tax-saving effort as the amount invested in insurance is tax exempted under Section 80C.

The OTP received by SMS is used to authenticate a user while transacting on the internet. The paperwork for buying insurance is tedious. The OTP received by SMS is used to authenticate a user while transacting on the internet. The paperwork for buying insurance is tedious.

MANY income tax payers tend to hurriedly pick up financial products to save taxes. Insurance plays a big part in this tax-saving effort as the amount invested in insurance is tax exempted under Section 80C. Given that it’s a popular choice, an individual can buy insurance online using one time password (OTP).

The OTP received by SMS is used to authenticate a user while transacting on the internet. The paperwork for buying insurance is tedious. You have to fill up forms and provide proofs of identity, birth, address, income, fill out nominee details, etc. After due verification, the insurer underwrites your insurance. But when buying online, you can skip some of these tedious steps.

Insurance with OTP verification

Insurance can be bought online using your Aadhaar card. You can enter your card number and the system gets your details from the UIDAI system, which manages the Aadhaar card data for individuals. Once these details are extracted, the system sends an OTP to your registered mobile number for authentication purposes. After confirming the OTP sent to your mobile number, the insurance company starts processing your application.

Buying insurance online has its own advantages. You can compare and choose very easily between the different schemes or between different insurance providers. This results in significant savings on premium and your time. You can also select from a plethora of add-ons by the click of a mouse.

Additionally, Insurance Regulatory and Development Authority of India (Irdai) has mandated that insurance companies issue policies in digital form for all types of purchases, online or offline. However, micro-policies where annual premium is less than R10,000 are exempted from this requirement. Life policies with a cover less than R1 lakh, or R10 lakh for term policies, will also be issued electronically.

Buying insurance online obviates the need to preserve your insurance papers for any number of years. If the insurance papers are lost, there are some hassles in making claims. Digitising your policy will help preserve it in electronic form and you can manage, retain, and retrieve your policy whenever you want.

Pros and cons of OTP authentication

The advantage of OTP verification is that you do not have to be physically present to sign your application form. OTP verification is done using an SMS sent to your registered mobile phone. All you have to do is to enter the OTP received in the given field and the process of authentication completes. The process is fast, efficient, and transparent, and helps customers close a transaction quickly.

One of the troubles with this method is that your cell number needs to be registered on your Aadhaar profile. If you have changed your phone number and that’s not registered with Aadhaar, you may encounter difficulties using this method. This may be tedious at the outset but can prove to be a great enabler later.

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Important points for buyers

Buying insurance has become quite easy with OTP verification. However, your work in choosing the right insurance for your needs is not over. It requires you to go through various options available in the market and take the one that is suitable for you. The internet makes it easier to browse through a number of policies and compare premiums and benefits. So, make the smart choice—use the facility and choose your ideal insurance plan.

The writer is CEO, BankBazaar.com

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