Insurance Buyers Compare More Plans As Premium Gaps Widen Across Health, Term And Motor Cover

• Nearly 75 per cent compare three health insurance plans before buying

• Health insurance comparison may lower average premiums by around Rs 5,000

• Motor insurance buyers can save 15-20 per cent through comparison

• Cheapest insurance plan may carry co-payments, limits, or fewer benefits

Insurance buyers are no longer relying on the first quote they receive. More people are comparing several plans before deciding, and the exercise can make a sizeable difference to the premium they finally pay.

An analysis by Policybazaar suggests that the price gap between plans for similar customer profiles can be wide across health, term and motor insurance. The variation is linked to insurer pricing, product structure, coverage limits, add-ons, deductibles, co-pay conditions and claim-related features.

Health Insurance Buyers Look Beyond One Quote

Nearly 75 per cent of health insurance customers now compare at least three plans before buying. According to the analysis, people who compare several options choose policies with an average premium of about Rs 25,000, against nearly Rs 30,000 for those who do not.

The difference is also visible in monthly pricing. A Rs 10 lakh family floater for a young family of three in Delhi may cost between Rs 773 and Rs 2,426 a month. For a 62-year-old couple with pre-existing conditions, premiums may range from Rs 2,423 to Rs 5,562 a month.

Lower premiums may come with trade-offs. Buyers may have to decide whether they are comfortable with a smaller hospital network, a deductible, co-payment, room-rent restrictions or fewer benefits.

Term Insurance Premiums Also Vary Widely

More than 40 per cent of term insurance customers now compare three or more plans, up from 32 per cent in 2023.

For a 30-year-old salaried non-smoker seeking Rs 1 crore cover until age 60, monthly premiums may range from about Rs 635 to Rs 958. For a 35-year-old married parent seeking Rs 2 crore cover, the range may be Rs 1,338 to Rs 2,165.

Price is not the only consideration. Claim settlement indicators, the sum assured, rider benefits and insurer credibility also influence the decision. Some buyers opt for higher cover after finding that the additional premium is modest.

Motor Buyers Weigh Add-Ons Against Savings

In motor insurance, nearly 70-75 per cent of customers compare at least three plans. Those who compare extensively may pay 15-20 per cent less than buyers who accept the first option.

For a three-year-old car worth Rs 10 lakh, a policy with zero depreciation and roadside assistance may cost between Rs 12,000 and Rs 25,000. For a car worth Rs 20 lakh, it may range from Rs 15,000 to Rs 35,000.

The analysis says average savings may be nearly Rs 8,000 on older vehicles and up to Rs 30,000 on newer ones.

Buyers often retain add-ons such as zero depreciation, engine protection, invoice cover and battery cover, while dropping features they consider less essential.

Sarbvir Singh, joint group CEO, PB Fintech, says easier access to several options is reducing information gaps and helping customers match cover with their needs and budgets.

Comparison can lower costs, but the cheapest plan may not always provide suitable protection. Coverage terms, exclusions, claim support and long-term affordability remain equally important.

FAQs

1. Why do insurance premiums differ so much for similar customers?

Premiums vary because insurers assess risk differently and offer different coverage, add-ons, deductibles, co-payment clauses, and claim-related features.

2. Should I always buy the cheapest insurance policy?

Not necessarily. A lower premium may come with trade-offs such as room-rent limits, smaller hospital networks, higher deductibles, or fewer benefits.

3. What should I compare besides the premium before buying insurance?

Check the sum insured, coverage, exclusions, waiting periods, claim settlement record, add-ons, hospital network and long-term affordability before making a decision.