 "Average health insurance cover rises 31% to Rs 19 lakh post-GST removal")
Across health, life, motor, travel and investments, Indian consumers didn’t just buy more protection this year—they bought bigger, longer and smarter, according to platform-level data tracking behaviour after key regulatory and pricing shifts, most notably the removal of GST on health insurance.
The clearest evidence of this reset is visible in health insurance. Average sum insured jumped 31%, rising from ₹14.5 lakh before GST removal to ₹19 lakh after, as buyers decisively moved away from sub-₹10 lakh covers, shows data analysed by Policybazaar.
Policies below ₹10 lakh fell 24–29% year-on-year, while demand surged sharply at the higher end: ₹10–25 lakh covers rose 47–56%, and ₹25 lakh-plus covers jumped 49–85%, depending on the comparison window.
This wasn’t just about affordability. It marked a behavioural shift. Consumers used the GST relief not to save money, but to upgrade protection—a rare but telling response in price-sensitive India.
That mindset extended to policy structure. Multi-year health covers gained traction as buyers locked in longer protection horizons. Four-year and five-year policies saw growth of 56% and 62%, respectively, while unlimited health plans, once a fringe product, captured 15.7% of purchases in 2025, up from just 2% of eligible buys in 2024.
The geography of demand also shifted. Tier 3 cities increased their share of health insurance purchases to 70%, up from 63.5% last year, while Tier 1 cities saw a sharp decline in share. This suggests that the next leg of insurance deepening is being driven less by metros and more by aspirational India—where rising incomes are meeting heightened health-risk awareness.
Health insurance uptick post-GST reforms
- ₹10–25 lakh covers increased by 47%, while ₹25 lakh and above covers rose by 85%. Policies with sum insured below ₹10 lakh declined by 24% post GST.
- Buyers increasingly opted for longer protection periods, reflected in the higher selection of 4-year and 5-year health insurance policies. 4-year and 5-year tenures increased by 56% and 62%, respectively.
Unlimited health plans gain share
- Unlimited health plans accounted for 15.7% in 2025 which was around 2% of eligible purchases in 2024.
- Sum insured shift: 2024 vs 2025
- Policies with sum insured below ₹10 lakh declined by 29% year-on-year.
- ₹10–25 lakh covers increased by 55.6%, while ₹25 lakh and above rose by 49.3%. Age profile of buyers (2025)
- 18–35 years accounted for 30% of purchases.
- 35–45 years formed 26%, followed by 46–60 years at 23% and 61+ at 21%.
Tier-wise city split
- Tier 3 cities increased their share from 63.5% in 2024 to 70% in 2025.
- Tier 2 cities rose marginally from 13.8% to 14.3%, while Tier 1 cities declined from 22.7% to 15.7%.\
Top cities by bookings
Delhi and Bengaluru led purchases, followed by Hyderabad, Pune and Mumbai this year.
Top claim reasons
Heart-related conditions, cancer and cataract remained among the most common claim triggers.
Seasonal/ infectious illnesses were high, day-care procedures and accidental injuries also featured prominently.
Add-on selection trends
Day 1 cover increased from 73% in 2024 to 81% in 2025.
Renewal bonus rose from 68% to 73%, while OPD rider adoption increased from 20% to 24%.
NRI demand across regions
USA and Canada recorded a 157% year-on-year increase by NRI customers, followed by Europe at 153%.
GCC bookings rose by 114%, while overall NRI bookings grew by 125%.