Why health insurance costs less online—and what you give up

While shopping for health insurance, I took quotes from multiple sources—through an agent, directly from the insurer’s website and via a broker. There appears to be a clear cost advantage in buying directly from the insurer’s website. Is there a catch, or should I simply go with the lowest-cost option? Also, there seems to be no price difference between buying through a broker and an agent. Is there a specific reason for this?

—Name withheld on request

Insurers are typically required to offer non-discriminatory pricing across distribution channels. This means you should see uniform pricing across agents, brokers, and banks for the same health insurance product configuration. However, insurers are permitted to offer a discount when a policy is sourced directly through their own website.

This discount reflects the cost of intermediary services. Broadly, intermediary support spans three areas: policy placement, claims assistance, and policy servicing. At the placement stage, an intermediary helps you compare options, explains benefits and exclusions, and tailors the product to your needs. They also assist with coordinating medical tests and documentation. Claims often require handholding, particularly in cases of denials, deductions or reimbursement claims. Over time, policy servicing may involve adding dependants, updating addresses or restructuring coverage. A good intermediary manages these processes on your behalf.

If you have access to a reliable agent or broker who is well-versed in claims support, it may be worth considering their services. Strong intermediaries typically have dedicated claims teams with experience across a wide range of cases and established working relationships with insurers’ claims departments. If, however, you are comfortable navigating policy selection, claims and servicing on your own, either personally or with support from family or friend, a direct purchase can make sense.

I recently came across super top-up health insurance. I could increase my sum insured to ₹5 crore for under ₹1,000, with a deductible of ₹20 lakh that would be covered by my existing health insurance policy. This sounds too good to be true. Why aren’t more people buying—or selling—this product?

—Name withheld on request

This is a useful product and is priced very reasonably. You should actively consider it as a way to enhance your overall health insurance cover. The main reason for its limited adoption is a lack of awareness. Over time, word of mouth is likely to drive greater uptake.

Another factor is distribution economics. Given the low ticket size, the relative cost of selling and servicing this product is high. As a result, it is actively marketed by only a limited number of intermediaries.

Abhishek Bondia, co-founder, SecureNow