Archive · 12 Dec 2025
Tier-II, -III Markets Drive 62% of New Health Insurance Policies
In India, more people are buying health insurance in smaller cities and rural areas instead of big cities.
These places now make up 62% of all new health insurance policies.
People in these areas are also choosing higher insurance amounts.
For example, in Tier-II cities, 47% of people now choose insurance between Rs 10–14 lakh, up from 27% a few years ago.
This change is happening because people are more aware of health insurance, it's easier to buy online, and it's more affordable.
Many people are also using monthly payment plans to make it easier to pay for insurance.
Tier-II, Tier-III, and rural regions accounted for 62% of new health insurance policies in FY26.
The share of policies in Tier-II cities increased from 23% in FY22 to 38% in FY26.
The share of policies in Tier-III cities increased from 31% in FY22 to 38% in FY26.
The share of policies in Tier-I cities decreased from 46% in FY22 to 38% in FY26.
Customers in Tier-II and Tier-III cities are opting for higher sum insured plans and using EMI payment options.
- Who
- Policybazaar and health insurance customers in Tier-II, Tier-III, and rural regions
- What
- Shift in health insurance policy purchases from metros to Tier-II, Tier-III, and rural regions
- When
- Fiscal Year 2025-26 (FY26)
- Where
- India, specifically Tier-II, Tier-III, and rural regions
- Why
- Rising awareness, easier digital access, increasing affordability, and the introduction of EMI payment options
- Percentage of new policies in Tier-II, -III, rural regions
- 62%
- Share of policies in Tier-II cities (FY22 to FY26)
- 23% to 38%
- Share of policies in Tier-III cities (FY22 to FY26)
- 31% to 38%
- Share of policies in Tier-I cities (FY22 to FY26)
- 46% to 38%
- Increase in Rs 10–14 lakh cover in Tier-II cities (FY22 to FY26)
- 27% to 47%
- Increase in Rs 10–14 lakh cover in Tier-III cities (FY22 to FY26)
- 24% to 49%
- Growth in EMI model adoption in Tier-III regions (FY23)
- 41%
- Growth in EMI model adoption in Tier-II regions (FY23)
- 38%
- Growth in EMI model adoption in Tier-I regions (FY23)
- 29%
