Where Should You Buy Term Insurance? Online, Agent, Bank, or Broker

Cheat Sheet

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Online purchases can save you up to 40% on premiums because there’s no agent commission baked into the price (per HDFC Life). If you’re comfortable doing your own research, this is the cheapest route.

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An insurance agent walks you through the process, but they can only sell one insurer’s products. They work for the insurer, not for you.

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Banks sell term insurance as corporate agents (called bancassurance). They’re limited to a maximum of three life insurers, and their staff aren’t insurance specialists.

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An insurance broker is the only intermediary who legally represents you, not the insurer. Brokers can compare products across unlimited companies and have a fiduciary duty to act in your interest.

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The policy itself is identical regardless of where you buy it. Claim settlement, policy terms, and coverage don’t change based on the purchase channel. What changes is the price, the advice, and the support you get.

You’ve decided to buy term insurance. Now where?

Most people fixate on which plan to buy and skip a question that can cost them lakhs over the policy’s lifetime: where should you buy it?

In India, you have four main options. You can buy directly from an insurer’s website (online), through an individual insurance agent, at your bank, or through an insurance broker. Each channel has a different cost structure, a different set of incentives, and a different level of advice. Some work for you. Some work for the insurer. And the premium you pay can differ by tens of thousands of rupees per year for the exact same coverage.

According to IRDAI data reported by Cafemutual, individual agents still account for about 51% of all life insurance new business premium in India, down from 62% in FY2019. Bancassurance (banks selling insurance) handles 33% of the total market and a full 52% of private sector new business. Online channels account for under 1% of total life insurance premium, though that number is misleading; the Axis Max Life India Protection Quotient 7.0 survey (May 2025) found that 22% of urban term insurance buyers now prefer buying online, up from 18% in the previous edition.

The gap between “all life insurance” and “term insurance” online numbers makes sense. Endowment and ULIP products, which dominate India’s life insurance premium volumes, are complex, high-commission products that agents push hard. Term insurance is simpler, and buyers who understand it tend to go online.

Buying term insurance online

When you buy term insurance from an insurer’s website, you deal directly with the company. There’s no intermediary. You enter your details, choose your coverage amount and term, complete e-KYC, pay the premium, and get a policy document, often within minutes.

The biggest advantage is cost. According to the HDFC Life website, online term insurance plans are around 40% cheaper than the same plan bought offline. This is because the insurer doesn’t need to pay agent commission (which can range from 20% to 45% of the first-year premium depending on the insurer). Some insurers offer additional online-specific discounts on top of this.

The flip side is that you’re on your own. Nobody will explain the difference between level cover and increasing cover, help you decide between a 30-year and a whole-life term, or tell you which riders are worth adding. You need to do that research yourself, and you need to compare across multiple insurer websites since each one only shows its own products.

The claims process is the same whether you bought online or offline. The insurer handles claims directly in both cases.

Online works best for: Buyers who are comfortable reading policy documents, comparing plans across insurer websites, and making their own decisions. If you know what you want, this is the cheapest way to get it.

Buying through an insurance agent

An individual insurance agent is licensed by IRDAI to sell policies for one insurer. This is the most common purchase channel in India; agents account for about 51% of all new life insurance business. At LIC, that number is 96%.

The agent’s job is to explain the product, help you fill out the application, guide you through medical tests, and assist with paperwork. A good agent genuinely simplifies the process, especially in smaller towns where digital literacy is lower or where buyers prefer face-to-face interaction.

But there’s a structural conflict. The agent works for the insurer, not for you. They earn commission from the insurer on every policy they sell. For term insurance, first-year commissions typically range from 20% to 45% of the premium, with renewal commissions of 3% to 7.5% in subsequent years. IRDAI removed fixed commission caps in April 2023; each insurer now sets its own rates within overall expense-of-management limits.

This commission is built into your premium. And because agents can only sell one company’s products, they can’t tell you if another insurer offers better coverage or a lower price for your profile. They’ll recommend what they have.

The Axis Max Life IPQ 7.0 survey notes that agent-driven mis-selling continues to erode trust in the industry. A common concern is that agents may steer buyers toward savings-linked products (which typically pay higher commissions) instead of pure term plans (which pay less but provide better protection).

Agents work best for: Buyers who want personal guidance through the process, especially first-time buyers or those in areas with limited internet access. Just be aware that the agent’s product recommendations are limited to one insurer.

Buying at your bank

When your bank sells you term insurance, that’s bancassurance. The bank acts as a “corporate agent” under IRDAI regulations, which means it can tie up with a maximum of three life insurance companies (one per category: life, general, and health).

Bancassurance is a massive channel. It accounts for 33% of all life insurance new business premium in India and 52% of private-sector new business, according to IRDAI data reported by Cafemutual. Banks have a built-in advantage: they already have your financial data, your salary account, and your trust.

The problem is that bank staff are trained in banking, not insurance. The relationship manager suggesting a term plan has targets to meet, and those targets are set by the bank’s insurance partner, not by your financial needs. The bank represents the insurer, not you.

There are two specific risks with buying term insurance from a bank. First, banks tend to anchor coverage to their loan exposure. If you have a ₹50 lakh home loan, they’ll suggest ₹50 lakh of term cover; but your actual protection need (income replacement for your family) is probably ₹1 crore or more. Second, if you transfer your loan to another bank, your term policy doesn’t automatically move with it. The RBI prohibits banks from forcing customers toward specific insurers, but in practice, you’ll face pressure to buy from the bank’s tied partners.

With only three possible life insurer tie-ups, your bank can’t show you the full market. You’re choosing from a short list.

Banks work best for: Customers who want the convenience of handling insurance alongside their existing banking relationship and don’t mind a limited selection. Useful if you’d otherwise never get around to buying term insurance at all.

Buying through an insurance broker

An insurance broker is the only intermediary in this list that legally represents you, the customer, instead of the insurer. Under the IRDAI (Insurance Brokers) Regulations, 2018, a broker owes fiduciary duty to the client. They can work with unlimited insurance companies across all categories and are required to carry professional indemnity insurance (minimum ₹1 crore for a direct broker, ₹10 crore for a composite broker).

This means a broker can compare term plans from every insurer in the market and recommend the one that fits your profile best. They also help with claims; unlike agents whose involvement often ends after the sale, brokers provide advisory support through claims, renewals, and policy changes.

The trade-off? Brokers are harder to find than agents. The broker channel handles only about 3% of total life insurance new business premium in India. And while brokers represent you, they’re still paid commission by the insurer, which creates some tension with the fiduciary role. The capital requirements to become a broker are also higher (₹75 lakh minimum for a direct broker), which limits their numbers.

A broker cannot simultaneously act as an insurance agent for any insurer, per IRDAI rules. If someone claims to be a “broker” but only sells one company’s products, they’re an agent.

Brokers work best for: Buyers who want unbiased advice and comparison across the full market but don’t want to do the research themselves. Particularly useful for complex situations involving health conditions, high coverage amounts, or NRI purchases.

How the four channels compare

	Online	Agent	Bank	Broker
Who they represent	N/A (self-service)	The insurer	The insurer	You (the customer)
Number of insurers	One (the insurer’s site you’re on)	One	Up to 3 (life)	Unlimited
Premium cost	Lowest	Higher (commission included)	Higher	Similar to agent
Advice quality	None (DIY)	Varies; biased to one insurer	Low; bank staff, not insurance specialists	Highest; fiduciary duty
Claims support	Direct with insurer	Agent may help	Minimal after sale	Active advocacy
Product bias	None	High (single insurer)	High (limited tie-ups, cross-sell targets)	Lower (but still commission-paid)

Two buyers, same profile, different paths

Meena, 32, IT professional in Bangalore. She earns ₹18 lakh per year and wants ₹1 crore of term cover till age 60. Meena is comfortable online; she reads personal finance forums, understands the difference between level and increasing cover, and knows she wants a pure term plan without return of premium. She visits three insurer websites, compares premiums and claim settlement ratios, and buys online in 20 minutes. Her annual premium is around ₹8,000.

Dinesh, 35, runs a textile business in Surat. He earns well but has never looked at insurance beyond the endowment policy his father’s agent sold him. His bank relationship manager suggests a term plan during a loan meeting, but it’s a ₹50 lakh cover tied to his loan amount. Dinesh’s chartered accountant connects him with an insurance broker, who assesses his actual needs (₹1.5 crore, given his family’s expenses and liabilities), compares plans across eight insurers, and finds one with a good claim settlement ratio that also covers his pre-existing thyroid condition without a loading. Dinesh pays about ₹14,000 per year, more than the online price, but he has the right coverage amount and someone to call when he has questions.

Neither path is wrong. The right channel depends on how much help you need and how much time you’re willing to invest.

So which channel should you pick?

Start with two questions. First: can you research term insurance plans on your own and make a confident decision? If yes, buy online. You’ll get the lowest premium, and the policy itself is identical to what you’d get through any other channel.

If you want help, the next question is: do you want advice from someone who works for an insurer, or someone who works for you?

An agent works for one insurer. A bank works for up to three. A broker works for you. The answer depends on how complex your situation is. If you’re a healthy 30-year-old salaried employee wanting ₹1 crore of straightforward term cover, an agent or even a bank can get the job done. If you have health conditions, need a large cover amount, are an NRI, or simply want to compare across the full market without doing the legwork yourself, a broker is the better choice.

One thing you should not do: buy term insurance from your bank just because it’s convenient, without checking whether the coverage amount matches your actual protection need. Banks anchor to loan values. Your family’s financial needs after your death will almost certainly exceed your outstanding loan balance.

FAQs

Is it safe to buy term insurance online?

Yes. A term insurance policy bought online from an insurer’s website has the same legal validity, the same IRDAI regulation, and the same claim process as one bought through an agent. The insurer issues the policy and settles claims the same way regardless of the purchase channel.

Is it better to buy term insurance online or offline?

If you’re comfortable researching plans yourself, online is cheaper; premiums can be up to 40% lower according to HDFC Life, because there’s no agent commission built in. If you need guidance, buying through an agent or broker gives you human support, but at a higher premium.

Where can I buy term insurance?

You have four options: directly from an insurer’s website (online), through an individual insurance agent, at your bank (bancassurance), or through a licensed insurance broker. Online gives you the lowest price. An agent or broker gives you guidance. A bank offers convenience but limited choice.

Can I take term insurance online?

Yes. Most major life insurers in India offer online term insurance purchase with e-KYC, digital documentation, and instant policy issuance. For straightforward cases without major health conditions, the process can typically be completed in under 30 minutes without physical paperwork.

What is the difference between an insurance agent and an insurance broker?

An insurance agent represents one insurer and earns commission from that insurer. A broker represents you (the customer), can compare products across unlimited insurers, and has a fiduciary duty to act in your interest under IRDAI (Insurance Brokers) Regulations, 2018. Brokers are also required to carry professional indemnity insurance (minimum ₹1 crore).