Delhi, Bengaluru’s Young High Earners Drive Term Insurance Boom

India’s young, high-earning professionals, seem to be more concerned and cautious about securing financial support for their families and loved ones. A recent report by Policybazaar.com, an online insurance marketplace, shows that young high-salaried individuals From Delhi and Bengaluru are fueling 30 per cent year-on-year (YoY) growth in term insurance purchases.

Term insurance is a type of life insurance that provides financial protection for a pre-stipulated period. Individuals buy term cover to build a safety net for families. For instance, if the policyholder passes away during this time, the insurance company pays a death benefit to the beneficiary (or nominees). The main goal of any type of life insurance is to offer financial security to the policyholder’s family.

Rising Takers of Term Cover

The report finds that high-earning individuals now constitute15 per cent of all term insurance customers, with their contribution growing at a remarkable 30 per cent YoY.

The high-salaried group, earning between Rs 15-20 lakh annually, marks up people who would be in their early 30s or 40s. This segment’s rising uptake of term cover highlights the increasing awareness among affluent individuals about financial security, wealth preservation, and creating a safety net for their families.

35 per cent of buyers are aged 30-34 and the average age of term insurance buyers in this category is 34 years. This reflects a growing trend of purchasing insurance early to secure lower premiums and avoid complications arising from existing health issues.

This is how term insurance is preferred per different age cohorts;

• <30 years: 20 per cent

• 30-34 years: 35 per cent

• 35-39 years: 25 per cent

• 40-50 years: 17-18 per cent

• >50 years: 2 per cent

Moreover, the data reveals that 12-15 per cent of high-salaried buyers are women.

The findings further show that not only they are actively securing their family’s future with term insurance purchases, but are also opting for higher cover.

Why Bigger Covers Matter

The report shows a growing appetite for substantial insurance covers, with the average sum assured for this group now close to Rs 2 crore. That’s a 20 per cent jump in just two years. It’s not hard to see why. High-income earners often juggle significant financial responsibilities, from home loans to children’s education to future legacy planning. For them, a higher cover means peace of mind.

Choosing the Right Payment Plan

Another interesting trend is how these buyers split their preferences between regular pay and limited pay plans. Regular pay plans offer long-term affordability, appealing to those who want steady premium payments spread out over time. On the other hand, limited pay plans, with terms of 5, 10, or 15 years, are ideal for those who want to wrap up their commitments early while maintaining financial discipline. It’s a balancing act between affordability and the freedom of fewer obligations.

Metros Lead, But Tier 2 Cities Are Rising

It’s no surprise that cities like Delhi NCR, Bangalore, and Mumbai dominate term insurance purchases. These cities are hubs for corporate professionals who have greater exposure to financial planning tools and resources, driving higher adoption rates.

But what’s notable is how Tier 2 cities are catching up. Improved financial literacy and rising incomes in places like Pune, Hyderabad and Chennai are beginning to close the gap and people are choosing term covers for unexpected turns of life.

Riders: The Safety Boosters

For many buyers, a basic policy isn’t enough. The report finds that riders remain an integral part of term insurance plans for affluent buyers. The most popular riders with term covers are;

• Critical Illness Cover: Rising health risks due to lifestyle changes make this rider essential

• Accidental Death Benefit: Frequent travelers seek additional security for travel-related risks

• Waiver of Premium (WOP): Ensures continuity of coverage, even during financial difficulties

Tax planning Spurs Term Purchases - Why?

The report notes that term insurance purchases by high-salaried individuals peak during key tax planning periods. These include tax declaration months like June and July, tax proof submission months such as December, and the financial year-end.

This is a season that spurts growth in term purchases since these periods create urgency among buyers to secure tax benefits while aligning with their long-term financial planning goals.

The data underscores a growing financial maturity among young professionals, especially those in high-income brackets. As financial literacy spreads and awareness deepens, this trend is likely to gain even more momentum, extending beyond metros to reach young professionals in smaller towns and cities.