 "Year-ender: The big insurance shifts of 2025 and what they mean for 2026")
The insurance market in 2025 moved decisively towards everyday healthcare protection, wellness-linked pricing and smarter underwriting powered by artificial intelligence. Industry leaders say this shift was driven by rising medical inflation, lifestyle diseases and consumers’ growing preference for predictable, year-round healthcare costs. As 2026 begins, the focus is turning to cashflow protection and stronger cover for high-severity illnesses.
OPD cover becomes mainstream
OPD (outpatient) benefits saw some of the strongest adoption this year. According to Vaibhav Kathju, founder and chief executive officer of Inka Insurance, OPD demand grew in double digits as families sought protection from frequent consultations, tests and medicines that make up 60-70 per cent of annual medical spend.
He notes that OPD utilisation was four to seven times higher than hospitalisation claims in 2025.
Policybazaar’s data shows that OPD-enabled plans formed around 15 per cent of new retail health policies, with high uptake among the 45-60 age group managing chronic conditions.
“For a 52-year-old customer with diabetes and hypertension, OPD reimbursement could cut annual out-of-pocket spending by over 70 per cent,” says Siddharth Singhal, head of health insurance at Policybazaar.
Industry-wide, insurers and brokers report the same shift.
Rajendra Upadhyay, chief growth officer at Choice Insurance, says rising “ABCD” lifestyle diseases, asthma, blood pressure, cholesterol and diabetes, have pushed consumers to pay more for routine-care coverage. Narendra Bharindwal, president of the Insurance Brokers Association of India, adds that OPD attachment in retail plans has risen from 5 per cent in FY23 to the mid-teens in 2025, with one in five policies likely to include OPD by FY26.
Wellness-linked premiums deliver measurable savings
Wellness-linked premium discounts moved from experimental to mainstream.
“Wellness incentives became a core expectation,” says Kathju, citing the example of a Pune consultant who earned a 100 per cent renewal rebate after meeting his annual step-count targets.
Singhal notes a steady rise in active engagement.
“About 34 per cent of customers used wellness tools meaningfully, and roughly 9 per cent paid their entire renewal premium through wellness points.”
Bharindwal observes that realistic savings for most customers fall in the 5-15 per cent range, translating to ~ 2,000–Rs 5,000 a year for an average urban family.
Arti Mulik, chief technical officer at Universal Sompo General Insurance, says most programmes now follow an “earn and burn” model using app-integrated HRA, step tracking, hydration logs and fitness activities.
She adds that customer engagement has strengthened significantly as these incentives help build healthier habits.
Term insurance buyers opt for higher cover and riders
Across the life insurance market, younger customers led a shift towards larger protection and rider-heavy term plans.
“Higher sums assured of Rs 1-2 crore became the new baseline for urban professionals,” says Varun Agarwal, head of term insurance at Policybazaar, noting stronger demand for critical illness and waiver-of-premium riders.
Kathju highlights similar behaviour: buyers increasingly view term insurance as an income-protection tool rather than a simple death-benefit product.
Bharindwal adds that first-time buyers in the 25-35 age band are entering with more awareness, often influenced by digital channels and real-life medical events within their peer groups. ALSO READ | Insurance industry flags concerns over proposed Insurance Amendment Bill
AI underwriting cuts friction and speeds up approvals
2025 marked a turning point for AI-driven underwriting.
“Approvals that once took five to ten days now happen instantly for healthy applicants,” says Kathju, pointing to the use of wearable data, digital health records and long-term health patterns. He cites the case of a Mumbai professional whose slightly elevated cholesterol no longer triggered mandatory medical tests because the insurer’s AI engine evaluated multi-year data trends.
Mulik notes that AI has transformed proposal verification through automated OCR, while Upadhyay observes that processing times have dropped to under 24 hours at some insurers. Bharindwal says many players now underwrite 40-60 per cent of retail applications straight through, without tests, significantly reducing friction for buyers.
What to prioritise in 2026
Experts agree on one central message for 2026, consumers must focus on cashflow protection, not just hospital bills.
Kathju emphasises critical illness coverage, particularly cancer-focused plans, noting the rising incidence among younger age groups.
Upadhyay calls CI riders “indispensable”, as survival often brings income disruption, not just medical costs.
Bharindwal says customers should pair term cover of 10–15 times income with disability and income-benefit riders that ensure monthly support for dependants.
On the health side, Singhal recommends consumables cover, renewal bonus riders and OPD, with Day 1 cover for those with pre-existing conditions.
Bharindwal highlights mental health cover, modern treatment benefits, restoration of sum insured and strong cashless networks as structural features that matter in real-world claims.
Mulik points to personalisation as the next step, with insurers combining OPD, wellness and early-diagnosis services into integrated health ecosystems.
As insurance products evolve, the underlying theme is clear, in 2026, families should prioritise protection that preserves income, supports early detection and shields day-to-day budgets from rising medical costs.