Only 29 registered web aggregators have the right to display insurance product comparisons and sell policies online
Most insurance advertisements on the internet claim to offer a 'comparison of insurance products on the basis of premium'.
But, in case you did you know, only web aggregators are allowed by Insurance Regulatory and Development Authority of India (IRDAI) to offer any comparison of quotes by insurers.
So, if you put out your contact details on unauthorised websites, you run the risk of the number being sold to direct marketing companies. Or if you end up buying products from such websites, the money goes down the drain.
According to regulations, a web aggregator is an insurance intermediary who maintains a website for providing an interface to prospective buyers of insurance for the purpose of price comparison and information of products of different insurers.
A total of 29 entities are registered as insurance web aggregators in India. Some of them include Policybazaar, MyInsuranceClub, PolicyX, AskArvi among others. The regulator has also listed two entities whose licence has now expired.
This would mean that any other entity outside of this list is not permitted to offer any comparisons. So, the product quotes that they offer could either be sponsored by a few companies or worse, it could be a malicious website trying to steal your data.
An easy way to find out is to visit the IRDAI website and click on the insurance web aggregators section, where a list of licensed companies has been put up. Also, only registered web aggregators display their license numbers on their websites. Fake sites will be easy to distinguish with the clear absence of the license number and date of registration with the IRDAI.
IRDAI rules state that web aggregators can display product comparisons on their website and thereby generate leads for insurance companies. However, they do not get commissions for passing on the leads and earn a fee only if a policy is sold through their platform.
Insurance web aggregators can only use factual data while listing out products. Depending on what an individual is searching for, premium payable, claims payment history of the company and features of the product are usually used as common metrics to rank an insurance company.
For instance, if you are looking for a term product with a return of premium feature, the website will display all such products offered by all insurers. No selective display of data is allowed. The premiums also have to be disclosed upfront to customers in order to help them make a decision.
Websites that claim to offer 'free quotes' have services for purchase of new policy as well as renewal of existing products like car insurance. However, customers must be aware that renewing policies from these entities would mean that you may get an invalid insurance product.
Any claim raised against such products purchased online will not be admissible in a court of law and are bound to get rejected.At a time when customers, on an average, spend about 3-4 hours online looking for the right insurance policy, it is imperative that you invest some of your time towards finding out whether the website is genuine or not.