Insurance Broker Fees: Is Your Policy Advice Biased?

IRDAI wants to link broker commissions to product complexity, not just sales volume. Brokers are pushing back. Here's what this tug-of-war means for your next insurance purchase and whether the advice you get is truly unbiased.

Here's what happened: IRDAI has proposed linking insurance broker commissions to product complexity and the effort involved in selling — not just sales volumes.. Insurance broker associations have formally opposed these reforms, arguing the new structure will hurt their business model and reduce their earnings.. Currently, brokers can earn significant commissions even on simpler insurance products, creating a potential conflict of interest for buyers..

What you should do: Ask your broker in writing to disclose their exact commission percentage before buying any new insurance policy — this is your legal right under IRDAI regulations.. Compare at least two policies independently on IRDAI's Bima Sugam portal or an aggregator before accepting your broker's first recommendation.. Avoid buying complex ULIP or combo insurance-investment products without understanding the full commission structure and actual insurance coverage you receive..

Pro tip: Under IRDAI rules, every insurance intermediary must disclose their commission if you ask. A broker who refuses or deflects is a red flag — walk away.

For readers weighing their credit and loan options, our personal loan guide and CIBIL score resources put this update in context.