Germany top driver for travel insurances, $250,000 cover is new normal

In 2025, Indian travellers quietly rewired how they think about risk on the road. Travel insurance—once an afterthought bought to tick a visa box—became a core trip essential. Data analysed by Policybazaar shows travel insurance issuance grew 15% year-on-year in 2025, reflecting a decisive shift from optional add-on to default protection—especially for international trips.

 

Where Indians travelled—and why it mattered

 

Destination choices shaped buying behaviour. Germany emerged as the top driver of travel insurance purchases in 2025, reflecting Schengen visa requirements and longer stays, followed closely by Thailand, where high-volume leisure travel drove demand. The mix of regulatory compulsion and post-pandemic travel enthusiasm pushed more travellers to insure—and insure better.

 

 

Bigger trips, bigger covers

 

The most telling change was in cover size. Travellers consistently upsized protection:

 

$250,000 became the preferred sum insured for Africa, Asia, Japan, Europe and worldwide trips.

$500,000 emerged as the norm for the US and Canada, where healthcare costs are significantly higher.

 

This wasn’t panic buying. It was a rational response to real-world costs—and an acknowledgement that medical emergencies abroad are the single biggest financial risk travellers face.

 

The rise of the ‘senior voyager’

 

Demographics added another layer. Senior citizens accounted for 15% of all insured travellers in 2025. Longer, more frequent leisure travel—and higher medical risk—pushed older travellers to seek comprehensive covers.

 

By contrast, student travel insurance remained a niche (1%), but steady, driven by long-stay education requirements. Individual policies dominated with a 75% share, underscoring the solo, flexible nature of modern travel, while family plans made up the rest.

 

Seasonality still rules—but behaviour has changed

 

Timing patterns remained familiar. May recorded the highest purchases, followed by April, aligning with summer vacations and early international bookings. But what changed was intent: travellers were buying insurance early and deliberately, not as a last-minute checkbox.

 

Claims reality check: health hurts most, baggage irritates most

 

Claims data explains the shift toward higher covers. Medical claims accounted for the highest claim value. In contrast, baggage loss, delays and trip disruptions were the most frequent by volume—highlighting everyday friction rather than catastrophic events as the most common pain points.

 

2025 Trend: 15% Growth in Travel Protection

Annual Surge: Travel insurance policy issuance grew by 15% Y-O-Y. This reflects the transition of insurance into a travel essential.

 

Month wise: May saw the highest travel insurance purchases, followed by April coinciding with summer vacations and early international leisure bookings 

Reality of claims -Medical vs. Baggage

 

By ticket size: Medical claims continue to account for the highest claim value, reflecting the high cost of overseas healthcare

 

By number of incidents: Baggage loss, delays and trip-related claims were the most frequent, highlighting travel disruptions remain the most common pain point for travellers.

 

The 2025 Wealth Shift: Millennials Lead as Retirement Planning Hits the Early Button

Millennials: The investment engine

 

 Primary Investors: This year, nearly 50% of all investment purchases come from investors in the age group 31-40 years, as they are the powerhouse driving investment sector (ULIP, GRP- Guaranteed return plan, and Pension products).

 

Secondary Investors: The 23-30 and 41-50 groups contribute a balanced 20-25% each, showing that while millennials lead, there is a healthy mix of participation from both entry-level professionals and mid-career veterans.

 

Retirement revolution: Planning hits the Early button

Last year, retirement products were dominated by the 35+ demographic. The once-surprising 90% share held by those over 35 has cooled to 75%. This translates to investors under 35years

now accounting for 1 in every 4 retirement plans sold.

 

Insight: Investors under 35 have effectively tripled their footprint in the retirement space (from 10% to 25% share), reflecting the rise of the FIRE (Financial Independence, Retire Early) mind set among India’s youngest professionals.

 

Commitment to the Long Game: The Rise of the 20-Year Investor

 

The 20-Year Club: 8 out of 10 Guaranteed return plan buyers are opting for 20+ year tenures. This reflects that investors are prioritizing peace of mind and compound growth over quick returns. GRP act as immunity from market fluctuations.

 

Market Context: From Explosive Growth to Enduring Stability

FY2024-2025: Last year experienced a massive 100% YoY growth.

FY2025-2026: Holding steady levels on a YTD (year to date) basis, reflects that the insurance and investment market has successfully retained the surge of new investors.

 

GenderDivide: Men still account for 80% of purchases; the gap is even wider in Tier 2 and Tier 3 cities highlighting an urgent need for products designed for women.

 

Urban-Rural Divide: Tier 1 cities contribute almost 50% of all new premiums, showing high financial literacy while the next wave of growth must come from investors and Tier 2 and 3

town.

 

How India Paid for Insurance in 2025

UPI becomes the default payment rail for insurance purchases this year

 

UPI has firmly established itself as the preferred payment mode for insurance buyers, accounting for 64.3 percent of all premium payments across categories.

 

 Cards continue to play a meaningful role, with credit cards at 18.42 percent and debit cards at 8.68 percent, while net banking contributes 7.25 percent.

 

Subscription behaviour mirrors product maturity

Payment frequency varies sharply by product category, reflecting how Indian consumers view insurance commitments this year. In life insurance, monthly payments dominate at 94 percent,

while annual payments account for only around 5 percent.

 

Health insurance shows a more balanced behaviour, with 61 percent opting for annual payments, and 35 percent choosing monthly, signalling growing comfort with both lump-sum

and subscription models.

 

In general insurance excluding health, annual payments continue to be the norm at 100 percent, driven by short-tenure, event-based covers. These splits are based on platform-level experience and observed customer behaviour patterns.

 

UPI Autopay and BNPL see strong first-time adoption this year

New-age payment mechanisms gained meaningful traction over the past year. UPI Autopay recorded around 1.5 million new registrations, highlighting growing trust in automated,

mandate-based premium payments.

 

In parallel, approximately 5 lakh customers used BNPL options to pay for their policy premiums, indicating rising demand for short-term liquidity support without traditional credit friction.