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Delhi and Bengaluru led health insurance bookings, with Hyderabad, Pune, and Mumbai also prominent
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Tier-3 cities made up 70% of health insurance purchases, rising from 63.5% the previous year
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Maharashtra topped motor insurance demand in FY26, ahead of Uttar Pradesh and Delhi
New platform data from Policybazaar’s year-ender fintech report revealed that India’s health insurance story in 2025 was shaped by two forces: big-city demand at the top end, and an even larger surge from smaller towns across the country.
Delhi and Bengaluru emerged as the top cities by health insurance bookings, with Hyderabad, Pune and Mumbai also among the leading contributors.
Top claims reasons cited were heart-related conditions, cancer and cataract. At the same time, infectious and seasonal illnesses were high, day-care procedures and accidental injuries.
Tier‑3 India Takes Over
Tier-3 cities accounted for 70% of all health insurance purchases in 2025, up from 63.5% a year earlier, as first-time buyers and families in smaller towns increasingly chose cover as a mainstream financial product rather than an optional add-on.
Tier 2 cities rose marginally from 13.8% to 14.3%, while Tier 1 cities declined from 22.7% to 15.7%.
Maharashtra Tops India’s Motor Insurance Demand in FY26
In motor insurance, FY26 demand was led by Maharashtra, which topped the charts ahead of Uttar Pradesh and Delhi.
Mahindra XUV 700 (Source: Company website)
Mahindra XUV 700 (Source: Company website)
US, Canada Drive 157% Jump in Overseas Health Insurance Purchases
Overseas segments posted sharp growth as well. NRI health insurance bookings climbed year-on-year, with customers in the US and Canada driving a 157% jump, followed closely by Europe, as expatriate families sought India-linked protection and continuity of care.
Travellers are opting for a much higher cushion for US and Canada, as healthcare costs are significantly higher in these two countries.
Germany Is India’s Top Travel Insurance Destination in 2025
This year Germany emerged as top driver, followed closely by Thailand reflecting a mix of Schengen visa requirements and high-volume leisure trips to Southeast Asia.
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