Unlimited health cover goes mainstream: Tier-3 India, Gen Z, and NRIs drive surge in adoption

Unlimited Sum Insured (SI) health insurance plans are witnessing rapid mainstream adoption in India as consumers seek stronger financial protection against rising healthcare costs, according to Policybazaar data. The share of Unlimited SI plans jumped sharply from just 0.05% in FY25 to more than 15% in FY27, reflecting growing concerns around medical inflation, increasing lifestyle diseases, and the rising cost of large-ticket hospitalisation.

After an extraordinary jump in FY26, adoption continued its momentum in FY27, recording another 108.9% year-on-year growth. The trend signals a behavioural shift among consumers, who are increasingly viewing traditional fixed-sum health covers as insufficient for future healthcare needs.

The growth has been supported by a mix of product innovation, rising awareness of unlimited benefits, digital distribution and comparison platforms, and broader market evolution.

Millennials lead, Gen Z emerges as growth driver

Millennials remained the largest buyers of Unlimited SI plans in FY27, accounting for nearly 57% of purchases while Gen Z contributed more than 30% of the category.

The data suggests younger consumers increasingly see comprehensive health insurance as a core financial planning tool rather than a discretionary purchase.

Women’s participation rises, but men dominate purchases

Women’s contribution to Unlimited SI purchases increased from 12.4% in FY25 to 16.3% in FY27, indicating growing awareness and uptake of comprehensive health protection among female consumers. However, men continued to dominate the category, accounting for more than 83% of purchases.

Tier-3 India leads the shift beyond metros

Comprehensive health insurance is no longer concentrated in metropolitan markets. Tier-3 cities accounted for the largest share of Unlimited SI adoption at over 41% in FY27 while Tier-2 cities expanded their contribution from 17% in FY25 to 25% in FY27.

The growth is being driven by higher post-pandemic health awareness, rising hospitalisation costs outside metros, improved digital access to insurance products and a growing middle-income population in emerging cities.

Among cities, Surat recorded the strongest growth in average ticket size (ATS), rising 45%, followed by Hyderabad at 43% and Mangalore at 41%.

Among major metros, NCR posted 36% growth in ATS while Pune and Bengaluru registered increases of 29% and 30%, respectively.

NRIs and first-time buyers opt for higher protection

Unlimited SI plans also gained traction among non-resident Indians (NRIs). Adoption among NRI customers rose from virtually zero in FY25 to 20% in FY26 and further to 36% in FY27. The trend indicates stronger demand for financial protection for families and parents in India amid escalating healthcare expenses.

Meanwhile, first-time insurance buyers are increasingly opting for larger health covers, with the share choosing Unlimited SI plans rising from 0.1% in FY25 to over 15% in FY27. Similar trends were seen among customers porting existing policies.

Individual policyholders recorded Unlimited SI adoption of over 18% in FY27, up from 0.06% in FY25, while family floater adoption rose from 0.04% to nearly 13%.

Customers purchasing Unlimited SI plans are also opting for broader protection features. Around 90% selected consumables cover to reduce out-of-pocket expenses, while nearly 70% chose Day-1 coverage benefits.

Siddharth Singhal, Business Head – Health Insurance, Policybazaar, said the trend reflects a clear shift in consumer mindset. “Indians are increasingly recognising that traditional health covers may not be sufficient to keep pace with medical inflation and treatment costs. Demand is expanding beyond metros, with strong uptake across Tier-II and Tier-III cities, younger consumers, first-time buyers and NRIs,” he said.

According to Singhal, customers are increasingly choosing significantly higher or unlimited protection from the outset rather than gradually moving from lower cover slabs while the popularity of add-ons points to a growing preference for comprehensive health protection.