Policybazaar's latest data shows that first‑time health insurance buyers surged to almost 18 lakh individuals, with two‑thirds coming from Tier‑2 and Tier‑3 markets. This uptick aligns with IRDAI's push to bring the so‑called 'missing middle' into coverage. The platform recorded a 5% increase in FY23, 40% in FY24, 67% in FY25 and 54% in FY26.
First‑time buyers from Tier‑2 and Tier‑3 cities grew 351% between FY22 and FY26, outpacing overall growth. Their share of new buyers rose to 67% in FY26 from 56% in FY22. Seven in ten new buyers came from these cities.
Kerala’s cities led the pack, with Malappuram up 128%, Kottayam 122%, Alappuzha 120%, Thiruvananthapuram 114% and Palakkad 113%. Nagpur and Coimbatore followed with 53% and 57% growth.
The 26‑to‑35 age group accounted for 27.7% of new buyers, while 36‑to‑45 made up 22%, together almost half the market. Men comprised 82.8% of first‑time buyers, women 17.2%, revealing a pronounced gender gap. Average sum insured doubled from ₹6.3 lakh in FY22 to ₹13.1 lakh in FY26, with 68% of policies now covering ₹10 lakh or more.
Sarbvir Singh, joint‑group CEO of PB Fintech, said the surge shows a shift in risk appetite, but new buyers still need policy clarity. He added that Policybazaar will roll out an educational campaign next quarter aimed at demystifying policies for Tier‑2 and Tier‑3 consumers.