Health POSP Economics: Ticket Size, Persistency and Family Floater Renewals

If a motor book is a bucket with a hole in it, a health book is a deposit that accrues.

The difference is not sentiment and it is not sales skill. It is a property of the contract. A motor policy is worth exactly the same to the client on the day it is issued as on the day it expires, which is why the client can move for a hundred rupees and lose nothing at all. A health policy is worth more to the client in year four than it was in year one, and the extra value is not transferable without effort. Waiting periods have been served. A pre-existing condition that was excluded at inception has come inside the cover. Claim-free years have built up as a bonus on the sum insured. None of that existed when they signed, and all of it evaporates or has to be argued for if they start again somewhere else.

That single asymmetry drives everything here. The client who leaves your motor policy loses nothing. The client who leaves your health policy loses something real, and knows it.

The price of that stickiness is that health is the most servicing-heavy product an individual advisor is likely to hold, and its renewal conversation gets harder every year rather than easier. A motor book churns and is easy. A health book compounds and is hard.

Before the economics, the boundary, because it is less tidy than the recruitment material suggests.

On the life side the position is documented. The IRDAI master circular governing point of sales products and persons in life insurance (IRDAI/LIFE/CIR/MISC/215/12/2019, consolidating the two guidelines of November 2016) lists the POS-Life products, and non-linked, non-participating health insurance products are among them, alongside pure term, non-linked non-participating endowment, immediate annuity and microinsurance. Two constraints travel with it: the premium paying term must always equal the policy term, and issuance turnaround must not exceed four working days.

On the non-life and health side, governed by the Guidelines on Point of Sales Person for Non-Life and Health Insurers (IRDA/Int/GDL/ORD/183/10/2015) and its 2017 modification, the original permitted set is motor, travel, personal accident and home. The list has been expanded over time beyond that set, and the expansion is understood to reach certain health and rural covers. The precise itemised current list is not something this piece will state as fact. The sum-insured ceilings and scheme inclusions that circulate widely appear in aggregator and insurer marketing pages rather than in a readable primary text, and a number repeated often is still not a sourced number.

The practical instruction is unglamorous and correct: get the operative list from your engaging entity in writing, and check it against IRDAI's own POS page at irdai.gov.in. What you may place turns on your principal's authorisation and the approved list on the day you place it, not on what a blog said.

Health changes the first of the three quantities that decide what a book pays.

Substitute your own numbers, but the shape holds. A two-wheeler package policy at INR 2,000 and a family floater at INR 25,000 differ by a factor of more than twelve. At any single rate, the floater pays twelve times what the scooter pays for a conversation nothing like twelve times longer.

Now the number you will have seen quoted, handled honestly. Published analysis of Indian broker economics puts realised yields on retail health and miscellaneous retail business at roughly 15 to 20 percent of premium, inclusive of variable components. That figure is real and sourced. It is not your take, and presenting it as such would be dishonest.

The reason is structural. A POSP is remunerated by the entity that engages them, under the contract of engagement, and is not an independent commission earner facing the insurer. Where an intermediary engages the POSP, the general market structure is that the insurer settles with the intermediary, which then remunerates the POSP under contract. A broker-level yield therefore sits at the top of a chain you sit at the bottom of. It sizes the pool. It does not tell you your share, and only your contract does.

So the question to put to your principal is not "what is the rate" but a narrower one: on this product, at this sum insured, is my remuneration struck on the base premium or the premium net of loadings, and does it move when the household crosses an age band? Those two answers change your annual income on a floater book more than any rate negotiation you are likely to win.

The family floater is where the accrual argument becomes concrete, and it is worth understanding as an instrument rather than as a policy.

Four things accumulate inside a floater that did not exist at inception:

1. Waiting periods served. The initial waiting period, the specified-disease waits and the pre-existing disease wait all run down with continuous cover. A client in year five has bought time a new policy would make them buy again.
2. Pre-existing conditions brought inside. The condition disclosed and excluded at inception eventually comes within cover. This is often the single most valuable thing in the contract and the client rarely knows it.
3. Accrued bonus on the sum insured. Claim-free years build cover the client never paid a fresh premium for.
4. Contestability running out. A health policy carries a moratorium after which the insurer cannot contest a claim other than on fraud. Every renewal moves the household closer to it.

Portability exists and preserves credit for waiting periods already served, which is the correct and honest thing to tell a client who asks. But portability is a process with a form, a timing window, fresh underwriting acceptance at the other end, and an outcome that is not guaranteed. It is not a click. The switching cost in health is not infinite. It is simply not zero, and in motor it is zero, and that difference is the whole business.

Which reframes the household arithmetic. In motor, the second cover in a household is a nice-to-have. In health, a floater covering four members is four people's worth of switching cost attached to one renewal decision. Nobody moves a family of four to save eight hundred rupees when moving means the youngest child's asthma disclosure gets underwritten again. That is not loyalty you earned. It is loyalty the contract built, and your job is to not squander it.

Here is the cost of the compounding, and the part nobody mentions when they hand a new advisor a health product.

Health premiums are age-banded. The floater that priced comfortably when the eldest member was 42 prices differently when they cross into the next band, and differently again after that. The bands are not gentle at the top. This produces a renewal conversation with a structure no motor renewal has: the premium went up, the client did not claim, and nothing about their life changed. From the client's chair this looks like punishment for good behaviour.

It compounds with medical inflation, which moves the whole price level independently of the household getting older. The client sees two increases stacked, experiences them as one, and attributes the whole thing to you.

This is where health books are actually lost, and not where advisors look. The motor client leaves for price. The health client leaves at a band crossing, in the year when the increase is large enough to trigger a re-decision that had gone dormant for four years. If you know your households' dates of birth, you know which renewals those are, years ahead. If your records carry names and phone numbers and no dates of birth, you find out on the day.

The move at a band crossing is not a discount, and cannot be, since Section 41 of the Insurance Act, 1938 forbids rebating premium or your own remuneration as an inducement to renew. The move is arithmetic the client cannot do alone. What the served waiting periods are worth. What starting fresh would genuinely cost once new waits and fresh underwriting are priced in. Whether the sum insured, deductible or room-rent basis should change rather than the insurer. That conversation is available to you and not to a comparison screen, which is the most durable commercial fact in this product.

Health is the most servicing-intensive product a point of sales person is likely to hold. A motor policy generates work at two moments, issuance and renewal, plus a claim that may never come. A health policy generates work continuously:

• Cashless authorisation at the hospital desk, at whatever hour the admission happens, with a frightened family who has never done this before.
• The third-party administrator, a party the client did not choose, does not understand, and will hold you responsible for.
• Sub-limits and co-payment clauses surfacing for the first time at discharge, alongside proportionate deduction on the room category.
• Day-care procedures, network-hospital status, and pre- and post-hospitalisation windows, each of which the client assumes you verified.
• Reimbursement paperwork, where most health claim disputes are actually decided.
• Endorsements as the household changes: a member added, a marriage, a new address, a restored sum insured.

None of this is remunerated as a separate event. All of it is why the client renews, and it is close to the entire explanation for why a health book persists at rates a motor book cannot reach.

It is also work you should be recording rather than merely doing. IRDAI was reported through the first half of 2026 to be preparing a consultation aimed at curbing mis-selling, with a paper expected by end-July 2026 and not published as of this piece's date. One idea attributed to it would pay a distributor more for advice, documentation and claims support than for selling cover as an add-on. These are proposals, not rules. But they describe the health advisor's existing job. An advisor holding two years of dated servicing records when something lands can evidence it. One who wrote nothing down cannot.

So reconcile against your principal's payout statement rather than a published yield. Record what your contract says a policy earns at issuance, then subtract what was credited. An expectation borrowed from broker economics is a grievance waiting to happen.

Set the accrual against the one number that decides a book's five-year fate: the share of policies that come back each year.

Retention in health is structurally higher than in motor, and not because of anything you did. The health client has accrued something and leaving costs them. The motor client has accrued nothing and leaving costs nothing. Everything else, price sensitivity, comparison screens, the reminder that arrived a day late, is noise on top of that one fact.

The size of the effect is the whole argument. A health book of 150 policies retaining nine in ten needs roughly fifteen fresh cases a year to hold its size. Halve the retention and the replacement burden does not double, it quadruples. Add that health tickets run an order of magnitude above two-wheeler tickets and the same hours buy a different business.

Here is the honest qualifier. Those fifteen fresh cases are harder to find than fifty easy ones, because nobody wakes up needing a floater the way they wake up needing to be legal on the road. Health demand has to be created. Which is why the two products are not rivals for your time: one is how households enter the book, the other is how the book compounds. The scooter policy that pays you very little earns its place by putting a household in your records with dates of birth attached and a reason to answer your call. The floater is what that household is worth two years later.

You cannot buy the shortcut either. A POSP is prohibited from paying any fee, commission or incentive, by whatever name, to anyone for introduction, lead generation or referral. That narrows the options to one: the households already in your book.

An advisor holding 200 policies across 180 unrelated individuals has a treadmill. An advisor holding 200 across 90 households, sixty of which also carry health, has a business worth something. Health will not give you a good month. It gives you a fifth year.