Insurance Commissions May Be Capped: Your Premium Safe?

IRDAI is considering capping how much commission insurance agents and banks earn when they sell you a policy. This could change premium pricing and the advice you get from your agent or bank.

Here's what happened: IRDAI is evaluating commission caps that would differ by channel — individual agents, corporate agencies, and bank-led distribution (bancassurance) would face separate ceilings.. The proposed shift moves compensation away from large first-year upfront payouts toward renewal-linked or spread-out structures across the policy term.. High commissions, especially in bancassurance, have long been linked to mis-selling concerns — customers buying ULIPs or endowment plans instead of pure term or health cover..

What you should do: Compare at least 3 insurers directly on IRDAI's Bima Sugam portal or an aggregator — don't rely solely on your bank's recommendation, which often carries the highest commission.. Check the claim settlement ratio (CSR) of any insurer before buying — IRDAI publishes annual CSR data free on its website; aim for insurers above 95%.. If you already hold a ULIP or endowment plan sold by your bank, review whether the charges and lock-in period still suit your goals — switching to pure term + mutual fund may work better..

Ask any agent or bank RM upfront: 'What is your commission on this product?' IRDAI regulations require them to disclose it — most won't volunteer the number.

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