As the IRDAI considers reforms to distribution rules and broker commissions, industry experts emphasise the importance of deciphering policy terms and choosing coverage that truly meets consumers’ needs, beyond just premiuмs.
India’s insurance buyers are being urged to look beyond price as the Insurance Regulatory and Development Authority of India weighs changes to distribution rules and broker commissions. In a recent edition of Money Today, insurance adviser Deepak Yohannan said the key question is whether lower commissions would eventually filter through into cheaper premiums, but he also stressed that the bigger issue for customers is avoiding mis-selling and understanding the fine print before they sign up.
That fine print matters because health insurance remains full of conditions that can affect a claim. Industry guides note that most policies begin with an initial waiting period of 30 days, while cover for pre-existing diseases is subject to a separate waiting period that the regulator has capped at 36 months. The moratorium period, after which insurers have limited grounds to reject older claims disclosures, was reduced to 60 months under the regulator’s 2024 master circular, according to specialist explainers on the rule changes. Those sources also note that some specific illnesses and procedures can still carry separate waiting periods.
The practical result, Yohannan said on Money Today, is that consumers should not choose a plan only because the premium looks low. Policy clauses such as room-rent limits, co-payment requirements and disease-specific exclusions can sharply reduce what an insurer pays at claim time. Guides for buyers also highlight the importance of checking whether a policy offers restoration or refill benefits, how contribution works when more than one policy is held, and whether accidental hospitalisation is excluded from certain waiting rules.
Health cover also needs to be sized correctly. Buying advice from insurance brokers and consumer guides generally points policyholders towards matching cover to their age, family size, medical history and city of residence, rather than simply picking the cheapest option. The same logic applies to the choice between an individual policy and a family floater, while a super top-up plan can be useful where a base policy may not be enough to handle a large hospital bill.
For life insurance, the conversation is just as much about adequacy as cost. Yohannan’s advice was that consumers should compare term plans carefully, assess how much protection their dependants would actually need and look at the insurer’s claims settlement record before deciding. The broader message from the programme was clear: regulatory tweaks may change how insurers sell policies, but the most reliable way to avoid disappointment is still to read the terms closely and buy protection that fits real-world needs, not just a monthly premium.
Disclaimer: This article is intended to inform and educate, not to recommend or endorse any financial product, investment or strategy. Please consider your own financial circumstances and seek professional advice where appropriate before making financial decisions.
