Is buying insurance from a bank (bancassurance) better or from an agent?

Asked 7 Jun 2025·2134 views

I have a savings account with ICICI Bank and their relationship manager is suggesting I buy a life insurance plan through the bank. She says bancassurance products have better returns and lower charges. I am 40 years old and looking for a 15-year term plan with survival benefits. Should I buy through the bank or go directly to LIC or a private insurer? What questions should I ask before signing up?

Asked by Priya Sharma

1 Answer

Bancassurance often means you're buying a unit-linked insurance plan (ULIP) or endowment plan rather than a pure term plan. These have higher charges (allocation charges, fund management fees) that eat into returns. For a 40-year-old looking for life cover with savings, a pure term plan + separately managed portfolio of mutual funds typically delivers 2-3% higher returns than endowment plans. Buy term insurance directly from an insurer or through a broker for the lowest premiums.

Answered by FinWiz24 Admin · 12 Jun 2025