India Is Moving Beyond Basic Term Insurance: Policybazaar Data Reveals a Shift to Holistic Protection

India’s term insurance market is undergoing a quiet but significant transformation. According to the latest analysis from Policybazaar, buyers are no longer satisfied with plain death cover. Instead, they are increasingly opting for comprehensive protection by adding riders such as Critical Illness (CI), Accidental Death Benefit (ADB), Accidental Total Permanent Disability (ATPD) and Waiver of Premium (WOP).

This trend reflects a growing awareness that financial security must extend beyond mortality to cover health risks, disability, and income disruption.

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Regional divide: South leads rider adoption

Policybazaar’s data highlights a sharp regional contrast in rider uptake:

• South India: 45–47% rider penetration

• North India: 21–23% (lowest adoption)

• East India: 32–34%

• West India: 30–31%
  
   

Among cities, Hyderabad emerged as the national leader, with rider adoption touching 52–56%, followed closely by Bengaluru and Kochi. The consistently higher uptake in southern cities suggests greater insurance literacy, stronger salaried employment bases, and higher awareness of lifestyle-related risks.

The North, while lagging, represents a high-potential growth zone, where targeted education and awareness initiatives could significantly improve adoption.

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Gender preferences show nuanced behaviour

While men overall add riders more frequently (30.3%) than women (25.8%), the type of rider chosen reveals important differences:

• Women show a stronger preference for Critical Illness riders, often opting for features like cancer screening and long-term health protection.

• Men tend to choose Accidental Death Benefit and ATPD riders, focusing more on accident-related risks.

This divergence suggests that women increasingly view term insurance as a health-linked financial safety net, not just life cover.

Critical Illness riders gain traction among young professionals

Demand for Critical Illness (CI) riders is strongest in tech-driven and affluent metros:

• Hyderabad: 12–13%

• Bengaluru: 10–11%

• Kochi: 9–12%

• Mumbai: 7–10%

These cities house younger, well-paid salaried professionals who are more aware of lifestyle-related health risks. Notably, in Kochi, nearly one in five new term policies includes a CI rider, underlining the growing emphasis on health-linked income protection.

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Waiver of Premium (WOP) sees fastest growth

One of the standout trends is the rapid rise of the Waiver of Premium rider, which ensures policy continuity if the insured becomes disabled or unable to earn.

• WOP adoption rose 42.5%, from 4.7% in July 2025 to 6.7% in October 2025

• Hyderabad (15.1%) and Bengaluru (11.9%) led this surge

• Women recorded the highest WOP adoption, reflecting increased focus on long-term financial resilience

Policybazaar notes that NRIs rely heavily on structured long-term planning to secure families in India, making disability protection a top priority.

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A clear shift toward comprehensive financial security

Commenting on the findings, Varun Agarwal, Business Head – Term Insurance at Policybazaar, described the trend as a “definitive market movement” toward holistic protection.

The surge in WOP adoption, dominance of disability riders, and strong NRI participation signal that Indian consumers are now prioritising protection against income loss and critical illness on par with death benefits.