Low Insurance Commission? Your Claim Risk May Rise

IRDAI wants to cut agent commissions to make insurance cheaper. But lower selling costs don't automatically mean better claims, simpler products, or honest advice. Here's what Indian buyers must watch for.

Here's what happened: Regulators are examining whether reducing agent and broker commissions in insurance makes policies more affordable for Indian consumers.. Industry experts argue that cutting distribution costs alone does not improve claim settlement rates, product transparency, or policyholder outcomes.. India's insurance penetration remains low at roughly 4% of GDP, suggesting the distribution channel still plays a critical role in reaching first-time buyers..

What you should do: Check your insurer's claim settlement ratio on IRDAI's annual report — aim for 95% or above before renewing or switching.. Read your policy's exclusion clause and sub-limit section carefully; these determine claim outcomes far more than what your agent earned.. Compare at least three term or health plans on premium AND claim experience — not just the cheapest option — before buying..

Hospital room rent sub-limits can void up to 40% of your claim reimbursement. Choose a plan with no room-rent cap, even if the premium is ₹500–₹800 more per year.

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