Policybazaar’s latest report shows that 45% of post-GST health insurance buyers are now opting for coverage between ₹15 lakh and ₹25 lakh, while 24% prefer ₹10–15 lakh, and only 18% continue with plans below ₹10 lakh.
The average health cover size has risen from ₹13 lakh to ₹18 lakh.
Tier-II Cities, millennials, and seniors drive uptake
Policybazaar’s data indicates that the shift toward higher coverage is not limited to metros. In tier-II cities, the share of customers opting for ₹15–25 lakh coverage has increased from 44.1% to 48.6%, while the share of low-value policies has dropped from 24.1% to 16.8%.
The platform also reported an 11.5% increase in high-sum insured purchases among customers aged 61 and above, highlighting rising health awareness among older policyholders. Millennials and middle-aged customers are leading the shift, with 39% of those aged 36–45 and 38% of those between 46–60 upgrading to higher coverage plans.
Add-ons and renewals gain momentum
Following the GST exemption, Day-1 pre-existing disease (PED) add-ons rose by 25%, while critical illness riders increased by about 20% month-on-month, according to Policybazaar.
The platform also reported a 50% rise in rider attachments on policy renewals and higher uptake of multi-year plans, indicating that consumers increasingly view health insurance as a long-term financial safeguard.
“The 0% GST exemption has acted as a powerful catalyst in the Indian health insurance ecosystem,” said Siddharth Singhal, Business Head – Health Insurance at Policybazaar.com. “It has addressed affordability and encouraged customers across age groups and geographies to move from minimal to comprehensive protection.”
Simplified process for NRIs buying term insurance
Policybazaar also noted relief for Non-Resident Indian (NRI) customers following the GST removal on term life insurance. Earlier, NRIs were required to pay premiums only through NRE accounts and submit international address proof annually to claim the GST waiver.
With the tax now set at 0%, NRIs can pay premiums through any bank account and automatically avail the benefit without additional documentation.
“Earlier, NRIs had to navigate multiple steps just to get the GST waiver on their term life premiums,” said Varun Agarwal, Head of Term Insurance at Policybazaar. “Now, the process is far more convenient, inclusive, and transparent.”
Insurance turns from compliance to conscious protection
According to Policybazaar, the GST waiver has not only made insurance more affordable but also transformed consumer behaviour. Customers are moving from minimal, compliance-driven purchases to conscious financial planning, with broader adoption across age groups and cities.
