Hello readers,

The title of today's article is "Buying potatoes from health insurance companies", yes you heard it right. This is how our Indian mentality works. Recently I had 5 sales calls from them there was a group of 3 elderly gentleman looking for health cover. They inquired me regarding plan details, its advantages and limitations. On completion of my presentation they told your company is charging 33000 Rs. while other is charging 27000 Rs. They concluded we do not wish to buy health insurance from your company. They had gathered so that they can bargain the amount of premium the way we bargain with hawkers that if we buy thrice the quantity what discount will you offer us.

The situation was like Mr. A is selling potatoes for 10 Rs. a Kg while Mr. B is selling it at 11 Rs. a Kg and hence we will purchase from Mr. A. People do not understand that the bargaining and hunting for low price strategy is for commodities where all supplies are same. The same strategy cannot be applied for Insurance. 

Comparing premiums for same same insured and selecting one with lowest premium is a type of suicide. The insurance market is highly competitive with companies incurring losses or normal profits. None of them can afford to provide more at less price or provide less at more price. The difference in pricing is due to difference in features.

So please those who are reading the article please understand that you have to purchase insurance and not potatoes. The strategy of bargain and less price for same quantity is not applicable here. Here there is a contract which is full of conditions, medical terms, highlighted advantages, undisclosed limitations and much more.

Compare features and not premium as we are buying a serious product and not potatoes.

Hardik Baxi

Baxi Investment