Here is what an insurer sometimes affords: A reduction on the premium once you purchase a medical health insurance coverage on-line or renew an current coverage. The reductions depend upon whether or not you’re a salaried particular person, insuring a lady youngster underneath a household floater plan, and even porting your coverage inside three years of shopping for it. In such circumstances, you may get a 5% low cost on the premium. People who keep a very good credit score rating or are an current policyholder can get a 7-10% low cost on the renewal premium, relying on the insurer they’re coping with.

Even as reductions have turn into essential for corporations to lure prospects, it will be important for coverage patrons to grasp the varieties of low cost supplied by insurers and whether or not these are real or mere promotional methods. Naval Goel, founder and chief government officer of PolicyX.com, says, “The pricing technique of insurers is determined by varied elements similar to claims made in a specific section, protection of the product and the advantages made obtainable to coverage subscribers. The reductions, too, are based mostly on these elements and are put in place solely for promotional functions.“

However, Sanjeev Govila, a Sebi Registered Investment Advisor (RIA), says that prospects get reductions due to competitors out there. So, some insurers provide enormous upfront reductions. “However, one ought to tread fastidiously the place it issues reductions. The show of so many low cost blocks on web sites can overwhelm you till you learn the fantastic print on the backside of the web site or coverage doc,” Govila says.

Adding to this, Amol Joshi, founder of Plan Rupee Investment Services, says, “Some websites list nearly 15-20 types of discounts, totalling more than 100%. However, when you read the fine print, you will know that the maximum discount offered is just 35%.“

Some insurance experts claim that discounts on premiums are merely a marketing gimmick. For instance, some insurers give a 2.5% discount to vaccinated individuals, which means that this discount is generally meant for all citizens.

Abhishek Bondia, principal officer and managing director at SecureNow.in, says, “Discounts offered by insurers need to be double-checked for effective value. Often, the price of competing insurers for the same benefit could be lower even without any discount. Also, the discounts could be at the cost of lower benefits. For instance, if the insurer offers an online discount, you will not get the services of a financial advisor who could help you in filing a claim. Or, if the insurer offers a discount based on your location, then it could mean restricting your hospitals to select zones.“

Insurer Vs web aggregator: All buyers should necessarily compare the discounts offered by insurers on their respective websites and that provided by a web aggregator. In some cases, the aggregator offers a lower premium for the same policy and coverage. Yet, an aggregator may not necessarily give discounts on every policy. Govila says, “The discounts offered on websites of standalone insurers are meant for individual retail clients. Aggregators have a larger customer base and so enjoy huge pricing power. That is why aggregators offer better rates than insurers.”

However, Goel stated, “In some circumstances, the insurers have a tie-up for a selected insurance policies with net aggregators and provide extra discounted charges.”

So, some of the discounts that reflect on an aggregator website is because the insurer wants to promote and sell that particular policy.

To be sure, there are several ways in which an health insurer can bring down costs. These include multi-year policies, voluntary deductibles, co-payments, etc. The moot question then is why do insurers offer discounts. Siddharth Singhal, business head- health insurance, Policybazaar.com, says, “Discounts, rewards and incentives are offered to win over those who are hesitant to buy health insurance” Bondia says, “These reductions assist in differentiating the general worth proposition and body a story that may assist insurers interact higher with the policyholders.”

Mint take: Check for standard parameters instead of discount offers. For instance, you must check the insurance company’s claim settlement ratio and the total amount of claims settled by the insurer. Second, opt for adequate sum assured at an affordable premium. Third, look for a cashless hospital network, so you don’t have to pay from your pocket during hospitalization. Fourth, check out the waiting period; the lesser the waiting period, the better it is to cover pre-existing diseases. Fifth, ensure that your health insurance policy has no sub-limits or room rent capping.