When it comes to buying health insurance in India, most people prefer the comfort of familiarity. It is common to hear lines like “Mere dost ne suggest kiya hai”, or “Chacha ji agent hain, unhi se le lo”. At first glance, buying a health insurance policy from a known person, relative, or friend might feel safe, convenient, and trustworthy. After all, who would want to deceive their own people?
But in reality, health insurance is one of the most critical financial decisions of your life. It is not like buying a gadget, clothes, or even a car. Health insurance is a long-term contract that can directly impact your financial security during emergencies. Making such an important decision under the influence of personal relations can lead to serious consequences later.
In this article, we will explore why it is generally not advisable to buy health insurance policies from friends, relatives, or known people, and why an independent, unbiased approach is far better.
1. Emotional Bias Overpowers Rational Decision-Making
When you deal with a relative or a friend, emotions often cloud your judgment. Instead of asking tough questions like:
- Does this policy cover all major diseases?
- What are the exclusions?
- Will this policy be affordable 20 years from now?
…you tend to think more about the relationship:
- “Agar main inki baat nahi maanunga toh bura maan jayenge.”
- “Ye to apne hi hain, shayad mujhe best de rahe honge.”
This emotional pressure prevents you from properly analyzing the product. In many cases, you end up buying whatever they suggest, without comparing with other options in the market. Later, when you face a claim rejection or a sudden premium hike, regret sets in—but by then it’s too late.
2. Conflict of Interest
Your relative or friend may genuinely want the best for you, but at the end of the day, they are also working for their commission. Agents typically earn 15–35% of the first-year premium as commission. This creates a conflict of interest.
- You want the best coverage at a sustainable premium.
- They want to sell the policy that gives them the highest commission.
Often, policies with flashy benefits or add-ons pay more to the agent, but they may not be suitable for your long-term needs. For example, a plan with maternity coverage may look attractive, but if you are already 40, it is irrelevant. Yet, such riders are pushed because they increase the premium amount and, hence, the commission.
3. Difficulty in Asking Tough Questions
When the agent is your friend or relative, you hesitate to grill them with detailed queries. Questions like:
- “What’s the claim settlement ratio of this company?”
- “Does this plan have room rent limits?”
- “Can you give me a comparison of three other companies?”
…become uncomfortable. You fear that asking too many questions will make them feel you don’t trust them. As a result, important discussions are skipped, and you end up making a half-informed decision.
On the other hand, with an independent consultant or agent, you can freely interrogate, demand comparisons, and even reject their recommendations without any social guilt.
4. Strain on Personal Relationships
Money and relationships rarely mix well. When a health insurance policy is bought through a friend or relative, things are smooth in the beginning. But the real test comes during claims.
Imagine:
- You or a family member is admitted to the hospital.
- You face delays in cashless approval or denial of certain expenses.
- You naturally expect the agent (your relative) to resolve it immediately.
If they fail—or if the insurance company simply does not cooperate—you might feel betrayed. This creates resentment and can permanently damage personal ties. Instead of solving your financial stress, the insurance policy ends up straining your relationship.
5. Limited Knowledge and Training
Not all agents—especially part-time ones—are deeply trained in the complex world of health insurance. Many relatives or friends who enter the insurance business treat it as a side income. Their product knowledge may be outdated, limited, or biased towards the company they represent.
Health insurance policies are full of technical details:
- Waiting periods
- Sub-limits
- Daycare procedures
- No-claim bonuses
- Portability rules
If your known person lacks expertise, you will be at a serious disadvantage. Remember, health insurance should not be bought casually. A wrong policy today can cause financial disasters tomorrow.
6. Lack of Proper After-Sales Service
One of the biggest myths is that “If I buy from a known person, they will surely help me in claims.” Reality is often the opposite.
- They may be too busy with their own work.
- They may not have the right contacts or escalation channels.
- They may stop working as an agent after a few years.
Since you trusted them more for the relationship than for their professionalism, you might find yourself without proper support when you need it most. Independent consultants or professional firms, on the other hand, usually have dedicated teams to assist in claims and escalations.
7. Lack of Market Comparison
Most friends or relatives represent one or two insurance companies, not the entire market. This means they will naturally try to sell you the policies of those companies, regardless of whether they are the best fit for your needs.
For example:
- You may need a plan with unlimited restoration.
- Another company may offer it, but your relative’s company doesn’t.
- Instead of suggesting the competitor’s product, they’ll convince you to settle with what they have.
This deprives you of a fair, unbiased comparison.
8. Long-Term Commitment, Short-Term Relationship
Health insurance is not a one-time product. You keep renewing it year after year, often for decades. Your needs also change with time—marriage, children, ageing parents, retirement.
But your friend or relative may not remain in the same role for so long. They might quit the insurance industry, move abroad, or simply lose interest. Once that happens, you will be left with no guidance, and the personal connection you relied upon will vanish.
9. Pressure to “Help” Them
Sometimes, buying from a friend or relative is not even about your needs—it’s about “helping” them. They might say:
- “Mere target poore karne hain, ek policy le lo.”
- “Support kar do, mujhe commission mil jayega.”
Out of sympathy, you agree. But remember: insurance is not a charity or favor. It is a serious financial tool. Choosing the wrong plan just to support someone can cost you lakhs in the future.
10. Professionalism vs. Familiarity
A professional, fee-based health insurance consultant or an unbiased advisor works only for you, not for the commission. Their job is to analyze your needs, compare across companies, and recommend what truly fits your requirements.
With friends or relatives, professionalism is often missing. You cannot expect detailed research, written comparisons, or long-term accountability from them in the same way you would from a professional.
Conclusion
Buying health insurance from a known person, relative, or friend may feel convenient in the short run, but it often leads to biased decisions, limited choices, and strained relationships in the long run. Emotional comfort should never outweigh financial wisdom.
Health insurance is not just another purchase—it is a shield for your family’s health and wealth. Make sure you choose it with clarity, research, and unbiased advice. Always separate relationships from financial decisions. Support your friends and relatives in other ways, but when it comes to health insurance, rely only on professionals who can guide you without bias.
Your future medical security deserves professional care, not emotional compromise.
