HNI term insurance bookings double since April 2023 as average cover rises 30%

India’s affluent families are opting for higher life insurance coverage, with high-net-worth individual (HNI) term insurance bookings doubling since April 2023 and the average sum assured rising 30%, according to data by Policybazaar. Nearly 50% of HNI customers buying term insurance are below the age of 35, pointing to growing demand among younger affluent Indians. 

Demand for multi-crore life cover is also rising. Policies with a sum assured of ₹3 crore or more have increased 25% while around 5% of HNI buyers opt for cover of ₹5 crore or above. Another 1.5% choose cover of ₹7 crore or more, and 1% opt for policies offering at least ₹10 crore in life cover. Policybazaar said demand for higher coverage has strengthened further following the introduction of the zero-GST regime for individual life insurance policies. 

Among salaried HNI customers, the average sum assured is around ₹2 crore. The highest sum assured purchased by an HNI customer on the platform stands at ₹25 crore. 

Riders gain traction 

HNI customers are supplementing basic life cover with riders against other financial risks. Accidental total and permanent disability (ATPD) is the most popular, chosen by 20% of customers, followed by critical illness at 15%. Accidental death benefit is opted for by 9% while 8% choose a waiver of premium rider. 

Bengaluru and Hyderabad lead in HNI term insurance demand, reflecting strong interest across major technology, financial and entrepreneurial hubs. Mumbai, Gurugram, Faridabad, and Bengaluru rank among the cities with the highest average sum assured. Men accounted for 82% of HNI term insurance buyers last year while women made up 18%, according to Policybazaar. 

“India’s HNI term insurance market is seeing a clear shift towards higher protection, with affluent customers increasingly opting for larger life covers. Our data shows that HNI term insurance bookings have doubled since April 2023, while the average ticket size has grown by 30%. We have also seen that nearly 50% of HNI customers are below the age of 35, highlighting how younger affluent Indians are prioritising financial protection early in life,” said Varun Agarwal, head of term insurance at Policybazaar. 

Pure protection plans preferred 

Less than 5% of HNI customers opt for Term Return of Premium (TROP) plans, which return premiums subject to policy terms if the policyholder survives the policy period. The data points to a preference for pure protection-oriented term insurance over plans that offer a premium refund. 

Payment preferences also suggest that affluent customers want to complete their premium commitments over a shorter period. Around 40% choose regular-pay policies, while the majority opt for limited-pay plans or options that allow premiums to be paid until the age of 60. 

Agarwal said, “Additionally, ₹5 crore-plus policies have nearly tripled following the introduction of the zero-GST regime. For HNI families, substantial life cover, along with add-ons such as Critical Illness and Accidental Total and Permanent Disability (ATPD), can play an important role in protecting family wealth, meeting financial commitments and securing their dependants’ future.”