Regulatory policy

Should you buy an insurance policy from an aggregator or a web broker?

I am 30 years old and I plan to take out health insurance from 5 lakh blanket. I originally planned to buy the font from a web aggregator. However, a broker has now offered a lower premium for the same plan. Is it right to buy policy from a broker?

-Name masked on request

Brokers and web aggregators are all licensed entities regulated by insurance regulator IRDAI. Each of the various distribution entities is governed by a set of rules and regulations. Among the various distributors, the broker is recognized as the representative of an insured rather than the insurers. So if you get a better product or price from a broker, you should go there.

However, note that retail products have a uniform price for a particular product. Price differentiation may occur with special products. In rare cases, insurers may offer a discount for policies purchased through specific channels such as their own websites. So if you get a lower price, check the product details and the reason for the discount.

I have taken out term insurance 50 lakh with a critical illness benefit rider. I would like to know if this rider is beneficial in the long run or should I purchase new health insurance by removing the critical illness rider from said policy.

-Name masked on request

The critical illness rider associated with term insurance provides coverage for certain illnesses only. If you are diagnosed with one of these illnesses, you will receive a lump sum benefit. Serious illnesses are becoming more and more common. So there is substantial value in retaining this runner.

However, a critical illness insurance plan does not replace a standard health insurance plan. The standard health insurance plan covers you for hospitalization costs for all kinds of health conditions, except for permanent exclusions.

These hospitalizations have a higher incidence than serious illnesses. Also, in many cases, the complications of common diseases can lead to very high hospitalization costs. Thus, coverage for hospitalization is a must.

Abhishek Bondia is Senior Director and Managing Director of SecureNow.in.

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