Health Insurance Renewals Surge in India, Hitting Record Highs

Health insurance renewals in India have reached unprecedented levels in FY26, as more consumers opt for modular and cost-effective policies. A report by Policybazaar indicates that the persistency of health insurance renewals has hit an all-time high, driven by the growing popularity of versatile health plans that provide high coverage at affordable rates.

The last two years have witnessed a notable increase in consumer-friendly health insurance options, which cater to a broader demographic. These modular plans are designed to accommodate various segments based on age, city tier, and pre-existing conditions, thereby making health insurance more accessible to a diverse audience. The report stated, “Health insurance renewals touching all-time high persistency in FY26; Modular, cost-effective and high-cover policies drive surge.”

A key factor contributing to this rise in renewals is the introduction of new-generation modular plans that feature cumulative bonuses and additional benefits tailored to modern needs. As lifestyle diseases such as diabetes, hypertension, and obesity become more prevalent, consumers are increasingly aware of the importance of health insurance. The report highlights a 25% increase in the share of customers with lifestyle-related health issues within the new business mix.

Innovative Features Driving Renewals

Plans that include cumulative bonus features, which automatically increase coverage every year regardless of claims, have become a significant driver of policy persistency. These plans allow for considerable growth in total cover at minimal additional premium costs, encouraging policyholders to maintain their coverage over time.

The report also notes that many policyholders are opting to upgrade their plans during renewals by adding new features and popular riders. Bonus cover riders, which enhance the base cover annually without regard to claims, have seen an attachment rate of 15% during the renewal process. This trend indicates a growing preference for comprehensive coverage among consumers.

Demographically, individuals aged 30 years and above represent approximately 80% of the consumer base and are most likely to renew their policies. Family floater plans are also exhibiting higher persistency ratios compared to individual policies, suggesting a shift in consumer behavior. Both metropolitan and smaller-city customers are demonstrating strong commitment to renewals, reflecting an increased awareness of the benefits of health insurance across India.

The findings from Policybazaar underscore a significant transformation in the health insurance landscape in India. With innovations in policy structure and a heightened focus on long-term value, the future of health insurance appears promising for consumers seeking reliable coverage.