Bancassurance: How Banks Sell Insurance in India

Bancassurance combines a bank’s distribution network with an insurer’s products. Through branches, relationship managers, websites, and apps, banks make insurance accessible to customers who might not otherwise actively shop for it.

According to the IRDAI Annual Report 2024-25, banks brought in 49.66% of private life insurers’ individual new-business premiums. This reflects their role as a major insurance distribution channel, though premium share doesn't indicate the number of policies sold.

But does buying insurance through your bank mean you’re getting the right policy for your needs?

In this guide, we’ll explain how bancassurance works in India, its benefits and drawbacks, the regulations that govern it, and what to check before buying a policy.

What Are the Different Bancassurance Models in India?

Distribution Routes

• Corporate Agency Model: This is the most common model in India. Banks register with the Insurance Regulatory and Development Authority of India (IRDAI) as corporate agents and sell policies from their partner insurers through authorized staff, websites, or banking apps.
• Insurance Broking Model: Most banks in India operate as corporate agents. Banks registered as insurance brokers can offer policies from multiple insurers and must recommend suitable coverage, explain policy terms, and compare available options. You can check your bank’s registration status in the IRDAI’s list of registered corporate agents.
• Referral Model: The bank introduces interested customers to an insurance company, which handles the sale directly. RBI's updated framework permits qualifying insurance referrals from January 1, 2027, subject to specified conditions.

Partnership/Ownership Structure

• Joint Venture Model: A bank invests in or jointly establishes an insurance company. For example, SBI (The State Bank of India) holds a majority stake in SBI Life. However, owning an insurance company does not automatically authorize the bank to sell its policies.
• Strategic Alliance Model: A bank partners with an insurer to sell policies, train employees, integrate technology, and provide customer support. However, the actual insurance sales must still follow the applicable IRDAI distribution rules.

Can Banks Sell Insurance From Multiple Companies?

Yes. Even if a bank owns part of an insurance company, it can sell policies from other insurers.

For example, SBI owns a majority stake in SBI Life, while HDFC Bank has ownership links with HDFC Life and HDFC ERGO. Similarly, ICICI Bank has ownership links with ICICI Life and ICICI Lombard.

Under IRDAI’s open-architecture framework, corporate agent banks can partner with up to nine life, nine general, and nine health insurers. Composite agents may exceed individual category limits, provided total arrangements do not exceed 27. Customers buying through a bank can choose from that bank's insurance partners.

Note: These are illustrative bank-insurer partnerships, not exhaustive lists of all insurers or policies available through each bank. Banks act as corporate agents and can distribute products only from insurers with which they have valid arrangements. These partnerships may change, so check the bank's latest disclosures before purchasing.

Source: IRDAI's List of Corporate Agents, official bank insurance disclosures, and Ditto's bank-specific insurance guides. (Partnership information reviewed as of 28 October 2026.)

What Types of Insurance Can You Buy Through a Bank?

01

Life Insurance

Term insurance, endowment plans, money-back policies, Unit-Linked Insurance Plans (ULIPs), and retirement annuities. These offer life cover, savings, investment, or retirement benefits, depending on the policy.

02

Credit-Linked Life Insurance

Helps repay outstanding home or personal loans if the borrower passes away, subject to the policy's coverage limits and conditions.

03

Health Insurance

Banks may offer individual, family-floater, senior-citizen, and critical illness policies. Most regular health plans are indemnity policies that cover eligible medical expenses, while benefit-based critical illness policies pay a fixed amount when a covered condition is diagnosed, subject to policy terms.

04

Personal Accident Insurance

Provides financial benefits for covered accidental death or disability.

05

Motor and Property Insurance

Covers eligible vehicle damage, theft, and property-related risks, such as fire or damage to insured homes.

Note: Not every bank offers all these policies. Available options depend on the bank's insurer partnerships and the insurance products the bank is authorized to sell.

IRDAI and RBI Regulations for Bancassurance

Bancassurance in India is regulated by both IRDAI and RBI. These regulations govern how banks distribute insurance, protect customers from mis-selling, and establish responsibilities for product recommendations and post-sales support.

Regulatory Watch: In September 2026, IRDAI proposed changes to address concerns about high commissions and mis-selling, including forced insurance bundling with loans and presenting long-term insurance as an alternative to fixed deposits. High distributor payouts can also increase costs and reduce value for policyholders. To encourage suitable recommendations and protect customers, the reform proposes lower commission limits for certain term and loan-linked policies and better transparency. These proposals are not yet in force. 

How to Buy Insurance Through a Bank?

Online vs. Offline Purchase

• Online: Explore policies through the bank's official app or website, review the terms, complete the proposal form, and pay the premium.
• Offline: Visit a bank branch to discuss available policies and request the relevant documents before purchasing.

What Should You Check Before Buying Insurance Through a Bank?

• Insurance Partners: Ask which insurers the bank represents and compare suitable policies outside its panel.
• Policy Type: Confirm whether you are buying an individual policy or joining a group policy.
• Loan-Linked Insurance: Check whether the insurance premium is added to your loan balance (meaning you may also pay interest on it), whether the cover reduces with the outstanding balance, and what happens after prepayment or refinancing.
• Coverage and Premiums: Compare equivalent coverage, not just premiums. Check exclusions, waiting periods, limits, and charges.
• Proposal Form: Verify your personal, medical, occupational, and lifestyle details, even if a bank employee fills out the form.
• Policy Documents: Request the Customer Information Sheet (CIS) and policy schedule. For ULIPs and applicable savings-linked life policies, review the benefit illustration and surrender conditions.
• Commissions: Ask about the bank's commission structure if relevant to your decision.
• Servicing and Claims: Keep the insurer's direct customer service and claims contact details.

Be cautious if insurance is presented as a fixed deposit, non-guaranteed returns are described as guaranteed, recurring premiums are portrayed as a one-time payment, or anyone asks you to conceal medical information.

Verify Your Policy After Issuance

Check the policy schedule and Customer Information Sheet (CIS) against what you agreed to. Verify the sum insured or assured, premiums, policy duration, disclosures, exclusions, and other conditions. Contact the insurer in writing if you find discrepancies.

Understand Your Free-Look Period

Individual life and health insurance policies with a term of at least one year have a 30-day free-look period from the date you receive the policy document. You can request cancellation and alteration during this period, subject to applicable rules and deductions.

Why Choose Ditto for Insurance?

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Conclusion

Buying insurance through a bank is not inherently a bad decision. Banks are a regulated distribution channel that can make insurance easier to access. However, their recommendations are generally limited to partner insurers, so the policy they offer may not be the most suitable option on the market.

Before purchasing, compare alternatives and review the policy's coverage, exclusions, disclosures, and conditions. Use the 30-day free-look period, where applicable, if you need to cancel a policy that does not meet your needs.

Note: Ditto is also an IRDAI-licensed corporate agent that works with partner insurers. Since insurance advice, policy comparisons, and claims support are central to our services, we place greater emphasis on these factors when evaluating insurance distribution channels. Our recommendations reflect our focus on policy suitability, personalized guidance, and long-term support. Keep this perspective in mind when comparing options.