Health insurance renewals in India touched an all-time high persistency in FY26, according to a report by Policybazaar. The findings highlight a shift in consumer behavior, with more policyholders continuing their coverage instead of dropping out. This marks a milestone in India’s insurance sector, indicating that health insurance is no longer seen as a short-term financial product but as an essential long-term safeguard.
The report points to the growing popularity of modular health insurance plans as a key factor behind the rise in persistency. These products offer cost-effective solutions with flexible options such as riders and add-on benefits. A major attraction has been the cumulative bonus feature, which increases coverage regardless of claims. Policyholders are choosing to retain these benefits by renewing consistently.
At the time of renewal, many customers are also enhancing their policies. Nearly 15 percent of policyholders are adding bonus cover riders, reflecting a trend toward expanding protection over time. Such features not only make plans affordable but also incentivize long-term continuity.
The analysis shows that family floater policies demonstrate higher renewal rates compared to individual health plans. Families appear more motivated to retain coverage to safeguard all members, especially as medical costs continue to rise.
Age is another determining factor. Roughly 80 percent of policyholders aged 30 years and above form the strongest base for persistency. This demographic is more likely to renew as it perceives higher health risks and values financial security during medical emergencies.
Policybazaar’s report also highlights that the share of customers with lifestyle diseases such as diabetes, hypertension, cholesterol issues, asthma, heart disease, and obesity has risen by 25 percent in the new business mix. This increase suggests that more Indians with pre-existing conditions are opting for health insurance and maintaining renewals.
This trend reflects both rising awareness and the growing burden of non-communicable diseases in the country. Insurers offering specialized coverage for such conditions have encouraged customers to stay invested for the long term.
The report finds that persistency is not limited to large cities. Customers in tier-II and tier-III towns also show high renewal rates, signaling broader penetration of health insurance awareness. With healthcare expenses rising uniformly across regions, households in smaller towns are equally motivated to maintain coverage.
(Rh/Eth/ARC/MSM)