Policybazaar's data shows a 277% leap in first‑time health insurance buyers, totaling 17.9 lakh new policyholders over four fiscal years. Year‑on‑year growth climbed 5% in FY23, 40% in FY24, 67% in FY25, and 54% in FY26, with Tier‑2 and Tier‑3 cities driving a 351% jump from FY22 to FY26. The share of new buyers from these smaller markets rose to 67% in FY26, up from 56% in FY22.
IRDAI’s push to cover the ‘missing middle’ has dovetailed with Policybazaar’s expansion, especially after the removal of GST on health plans in September 2025. The policy shift has encouraged consumers to opt for larger coverages, with the average sum insured doubling from ₹6.3 lakh in FY22 to ₹13.1 lakh in FY26.
Sarbvir Singh, joint group CEO of PB Fintech, said: "We’re seeing a steady stream of new customers, mostly in Tier‑2 and Tier‑3 cities, who are young, family‑oriented, and starting with larger covers than in FY22. Our role is to guide them through policy selection and claim support."
The 26‑35 age cohort now accounts for 49.64% of first‑time buyers, while the 36‑45 group represents 21.98%. Men comprise 82.81% of new purchasers, women 17.19%, reflecting a pronounced gender gap. In FY26, 68% of first‑time policies offered coverage of ₹10 lakh or more, compared with 32% in FY22.
Looking ahead, Policybazaar plans to launch an educational toolkit by Q1 2027 to demystify coverage options for new buyers. Meanwhile, IRDAI is targeting a 70% coverage rate by 2028, which could further accelerate the trend toward higher‑value health policies across India.