You can, and plenty of people do it well. The branch isn’t the risk. The risk is signing a policy you haven’t compared, or one that does a different job from the one you need. If your relationship manager brought up insurance while you were signing home loan papers or renewing a fixed deposit, here is how to decide before you put pen to paper.
What Is The Bank Actually Selling?
A bank that sells insurance acts as a corporate agent. It doesn’t carry the risk or pay the claim. The insurer does – IRDA rules let a corporate agent tie up with up to nine life insurers, and many banks work with fewer, so the counter shows you a shortlist rather than the whole market. The bank earns a commission on what it sells, as any agent does.
None of that is a problem. It simply tells you which questions to ask first. Whose policy is this, and what else is on the shortlist?
Where The Branch Genuinely Helps
Your KYC is already done. Premiums can auto-debit from the account your salary lands in, so a missed payment is less likely, and a lapsed policy protects nobody. There’s a named person to call when a nominee needs changing. That support is worth something if you’re buying cover for an older parent, or if you’d rather talk it through than scroll a comparison page.
What You Can’t See From The Branch Desk
A conversation at the counter usually begins with a product. A good decision begins with a need: who depends on your income, how much they’d need, and for how many years. Start there, and the product question gets much easier.
The best life insurance plan for you is the one that meets that need at a price you’ve checked, whichever counter or screen it came from. Two plans with the same cover can still differ on premium, riders, payout options and the insurer’s claim record, so one quote is never enough to judge by.
Savings Plan Or Term Plan: What Does ₹50,000 A Year Buy?
This is where the decision usually turns. Say the branch suggests a savings plan at ₹50,000 a year, with life cover of ₹5 lakh. Those are example figures, so read the actual sum assured on the benefit illustration you’re given.
Now put the same budget against a pure term plan. For a healthy 30-year-old non-smoker, ₹1 crore of cover till 60 often costs somewhere around ₹8,000 to ₹12,000 a year. That’s twenty times the cover for a fifth of the money or less. The remaining ₹38,000 to ₹42,000 can go towards a separate savings goal.
A savings plan isn’t a bad product. It does a different job, because it pays money back at maturity. If your family would struggle without your income, the cover amount should come first, and a term plan is the cheapest way to get a large one.
The Loan Cover Question
When you take a home loan, the branch will often suggest a policy that clears the outstanding amount if you die. The idea is sound. How it’s paid for deserves a closer look.
Many of these are single-premium policies, and the premium is sometimes added to the loan. Suppose a ₹60,000 premium is financed into a 20-year loan at 8.5%. Your EMI rises by about ₹521, and over the full term you repay roughly ₹1.25 lakh for that ₹60,000 policy. Both figures are illustrations, so use the real premium and rate from your sanction letter.
Ask whether the cover reduces as the loan is repaid, and what happens to it if you prepay or move the loan to another lender. A level term plan sized to the loan stays with you whichever bank holds the mortgage. Also ask, in writing, whether the policy is a condition of the loan or an option.
How Does Buying Online Compare?
Online, you set the pace. You can change the cover amount and term and watch the premium move. You can read the policy wording before anyone asks for a signature, and look at several insurers’ claim records side by side. For some plans, the online premium is also lower than the same cover bought through an intermediary, so compare like for like.
Online quotes still go through underwriting, so the final figure depends on your health, habits and income proof.
Going to the branch this week? Check what term cover costs at your age first, so the quote at the desk has a number to be measured against.
Take a screenshot of the figure with you. It makes the conversation at the desk much shorter.
When The Branch Is The Right Call
Buy at the branch if the plan their matches your need and its premium holds up against what you found elsewhere. It also makes sense if auto-debit from one account is what will actually keep the policy running, or if you’re buying for a parent who’ll need help with servicing later. Convenience is a fair reason to choose a seller. It isn’t a reason to skip the comparison.
Questions To Ask Before You Sign Anywhere
- Is this a pure term plan or a savings plan, and what exactly is the sum assured?
- Which insurer issues it, and which others does the bank sell?
- Is the premium being added to my loan?
- Does the cover reduce over time, and what happens if I prepay or switch lenders?
- Is this policy compulsory for my loan, or optional?
If you’ve already signed, you still have time. Under IRDAI’s 2024 rules for life insurance, you get 30 days from receiving the policy document to review it and return it if it doesn’t suit you. The refund is the premium minus a few deductions, such as stamp duty, medical examination costs and cover for the days you were insured.
The bank is a perfectly good place to buy insurance. It just shouldn’t be the only place you look.
