Young buyers exiting health insurance within 3 years: Survey
More than half of young Indians aged between 24 and 34 who purchase health insurance discontinue their policies within the first three years, highlighting a major retention challenge for the industry.
According to a survey by Niva Bupa Health Insurance, around 55 per cent of policyholders in this age group lapse their policies within three years of purchase. Industry executives said affordability pressures, rising premiums and limited perceived value due to low claim usage are key reasons behind the trend.
The survey found that many young customers discontinue policies instead of switching insurers. Around 46 per cent cited affordability as the main reason for lapsation, while many policyholders also faced competing financial obligations such as personal and home loans.
Industry experts said retaining younger policyholders is critical for long-term sustainability of the health insurance business.
Star Health reports Q4 profit growth
Star Health and Allied Insurance Company reported a net profit of Rs. 111 crore in the quarter ended March 2026, compared to Rs. 50 lakh in the corresponding quarter last year.
The insurer’s net earned premium increased around 14 per cent year-on-year to Rs. 4,327 crore during the quarter, reflecting continued business expansion. Gross written premium for FY26 rose 16 per cent to Rs. 20,369 crore, while the company maintained a market share of around 31 per cent.
Star Health said its combined ratio improved to 98.8 per cent in FY26 from 101.1 per cent in FY25, supported by better underwriting discipline and operating efficiency.
Managing Director and CEO Anand Roy said the company settled nearly 30 lakh claims worth over Rs. 11,900 crore during FY26.
High-value health insurance policies see sharp rise
The share of high-value health insurance policies with coverage ranging from Rs. 20 lakh to over Rs. 1 crore has more than doubled following the government’s reduction of GST on individual health insurance policies.
According to data from Policybazaar, the share of policies with coverage between Rs. 20 lakh and Rs. 1 crore increased from 11 per cent to 16 per cent, while policies with coverage above Rs. 1 crore rose sharply from 2 per cent to nearly 12 per cent.
Industry experts attributed the rise to improved affordability after GST on retail health insurance was reduced from 18 per cent to zero. They also noted growing customer awareness about rising healthcare costs and increased interest in unlimited coverage plans.
Policybazaar said demand for higher-coverage health plans has nearly doubled in recent months.
Health insurance share in non-life industry rises to 41%
Health insurance continued to strengthen its dominance in India’s non-life insurance industry during FY26, with its share rising to 40.8 per cent from 38.6 per cent a year earlier.
Health insurance premiums grew 15.4 per cent to around Rs. 1.4 lakh crore, significantly outpacing the overall non-life industry growth of 9.3 per cent. Total gross direct premium income of the non-life sector stood at nearly Rs. 3.4 lakh crore during the year.
Among insurers, The New India Assurance Company remained the largest health insurer with premiums of Rs. 21,531 crore, followed by Star Health and Allied Insurance Company with Rs. 18,435 crore. Standalone health insurers collectively recorded growth of 19.4 per cent, outperforming the broader market.
Industry experts said rising medical inflation, growing awareness and demand for specialised health products continue to drive expansion in the segment.
Nearly half of Indians now covered by health insurance
Nearly half of India’s population is now covered under health insurance schemes, according to findings from the latest National Sample Survey conducted by the Statistics Ministry.
The survey showed health insurance coverage in rural areas increased from 14.1 per cent in 2017-18 to 47.4 per cent in 2025, while urban coverage rose from 19.1 per cent to 44.3 per cent during the same period.
Coverage under government-backed schemes such as Ayushman Bharat Pradhan Mantri Jan Arogya Yojana expanded sharply, contributing significantly to the rise in insured population.
Despite wider coverage, out-of-pocket healthcare costs remain high. Average hospitalisation expenses stood at Rs. 6,631 in public hospitals but increased sharply to over Rs. 50,000 in private hospitals. Experts noted that while insurance penetration has improved, affordability of healthcare services continues to remain a major concern.
Health insurance coverage rises sharply in rural India
Health insurance coverage in rural India has nearly tripled over the past decade, reflecting the growing focus on financial protection, public healthcare access and social security expansion across the country, according to recent government data.
The data highlights a significant rise in health insurance penetration driven largely by government-backed schemes such as Ayushman Bharat and various state-sponsored healthcare progra-mmes. Increased awareness, digital enrolment systems and wider health-care infrastructure have also contributed to higher participation among rural households.
Government expenditure on social security and welfare programmes has similarly recorded substantial growth during the period. Officials stated that increased public investment in healthcare, insurance access and welfare initiatives is aimed at reducing out-of-pocket medical expenses and improving financial resilience for economically vulnerable populations.
Experts believe the expansion of health insurance coverage is particularly important for rural India, where medical emergencies often create severe financial stress for families. Broader insurance penetration can improve healthcare accessibility, encourage preventive care and support long-term economic stability.
Industry observers also noted that rising insurance awareness in semi-urban and rural regions presents significant growth opportunities for insurers, intermediaries and digital health platforms. Technology-led distribution models, simplified products and government partnerships are expected to further strengthen insurance inclusion in the coming years.
The latest figures underline India’s continuing efforts to expand healthcare protection and build a stronger social security framework for its population.
Family health insurance targets India’s “missing middle”
Family health insurance plans are increasingly being positioned as an important solution for addressing the healthcare protection needs of India’s “missing middle” – individuals and families who are not covered by government welfare schemes yet often lack sufficient private health insurance protection.
Industry experts note that rising healthcare costs, medical inflation, and growing awareness regarding financial protection are encouraging more households to consider comprehensive family health coverage. However, affordability, limited awareness, and accessibility challenges continue affecting insurance penetration among middle-income populations.
Family health insurance plans are gaining attention because they offer combined coverage for multiple family members under a single policy, helping improve affordability and simplify policy management. Experts believe such products can support broader healthcare access and reduce financial vulnerability arising from unexpected medical expenses.
