75% insurance buyers save up to 70% on premiums by comparing plans: Report | Personal Finance

Buying insurance without comparing plans could mean paying far more than necessary for similar cover. Data from Policybazaar shows that many Indians compare multiple policies before making a purchase, helping them find lower premiums without necessarily compromising on protection.

 

The trend comes at a time when rising healthcare costs, higher awareness about financial protection and the rapid adoption of digital platforms are changing the way people buy insurance. While price remains an important factor, buyers are increasingly looking at claim settlement records, coverage, add-on benefits and long-term value before making a decision.

 

Why comparing policies is becoming important

 

Insurance products are rarely identical, even when they appear to offer similar coverage. Premiums differ because insurers use different pricing models, underwriting practices, product structures and benefits.

 
 

Policybazaar’s analysis shows that nearly 75 per cent of health insurance customers now compare at least three plans before buying a policy. Those who compare extensively end up paying, on average, around 20 per cent lower premiums than those who choose the first available option.

 

The findings indicate that comparison is no longer just about finding the cheapest premium. Buyers are increasingly evaluating what they receive in return for the amount they pay.

 

Health insurance: Premium gaps can be significant

 

According to the analysis, premiums for similar customer profiles can differ by as much as 70 per cent across insurers.

 

For example:

 

A Rs 10 lakh family floater policy for a young family of three in Delhi ranges from Rs 773 to Rs 2,426 a month.

 

For a 62-year-old couple with pre-existing medical conditions, premiums range from Rs 2,423 to Rs 5,562 per month.

 

The report says younger buyers generally compare policies mainly to reduce premiums. Existing policyholders, however, tend to focus more on features such as hospital networks, room rent eligibility, deductibles, co-payment clauses and claims experience before renewing or switching plans.

 

This is particularly relevant as medical inflation in India continues to remain high, making affordability a growing concern for families.

 

Term insurance: Looking beyond the cheapest premium

Price differences are also substantial in term insurance.

 

Policybazaar found that more than 40 per cent of buyers now compare at least three policies before purchasing, compared with 32 per cent in 2023.

 

For a 30-year-old salaried non-smoker seeking Rs 1 crore life cover, monthly premiums can range from about Rs 635 to Rs 958. For a 35-year-old married parent purchasing Rs 2 crore cover, premiums can vary by more than 60 per cent across insurers.

 

Interestingly, the report notes that many buyers increase their sum assured after comparing plans because they discover that a higher level of protection often requires only a modest increase in premium.

 

Claim settlement indicators remain the most influential factor for buyers, followed by:

 

• 
  Sum assured
• 
  Rider benefits
• 
  Value-added features
• 
  Premium-to-cover ratio

 

Motor insurance: Savings can run into thousands

Comparison is also changing the motor insurance market.

 

The analysis estimates that buyers who compare multiple policies save around Rs 8,000 on older vehicles and as much as Rs 30,000 on newer vehicles. Customers who compare several plans generally pay premiums that are 15-20 per cent lower than those who do not.

 

Premiums vary because insurers differ in pricing, insured declared value, available add-ons and claims-related benefits.

 

The report notes that customers are willing to pay extra for features such as Zero Depreciation, Engine Cover and Invoice Cover, while add-ons such as roadside assistance are more commonly dropped to reduce premiums.

 

Digital platforms are changing buyer behaviour

The study also highlights a broader shift in consumer behaviour.

 

First-time buyers generally focus on keeping premiums low, while repeat customers place greater emphasis on coverage quality and insurer credibility. Buyers in Tier-II and Tier-III cities are also spending more time comparing policies before making a decision, often reviewing multiple plans and discussing options with family members.

 

According to Sarbvir Singh, joint group chief executive officer of PB Fintech, wider access to information through digital comparison is reducing the information gap between insurers and customers. As buyers become more informed, insurers are also under greater pressure to offer competitive pricing and products that better match customer needs.

 

What policyholders should consider

 

While comparing plans can reduce premiums, experts caution that the cheapest policy may not always offer the best protection. Before buying insurance, consumers should compare:

 

• 
  Coverage and exclusions
• 
  Claim settlement record
• 
  Hospital or garage network, where applicable
• 
  Waiting periods and co-payment clauses
• 
  Add-on benefits
• 
  Overall value rather than premium alone

 

As insurance products become more varied and digital platforms make comparison easier, informed decision-making is increasingly becoming an important part of managing personal finances. For consumers, spending a little extra time comparing policies could translate into meaningful savings without compromising on financial protection.