Health Insurance Renewals Touch All-time High Persistency In FY26, Says Report

Health insurance renewals in India have reached their strongest levels yet, with persistency ratio climbing steadily over the last five years, a new analysis by Policybazaar, an online insurance marketplace shows. The number of policy (NOP) persistency has grown by about 400 basis points (4 per cent), while gross written premium (GWP) persistency has improved even more sharply, by nearly 700 basis points (7 per cent).

These numbers show a shift in how consumers are viewing their health insurance. Rather than switching or dropping out of coverage, more policyholders are choosing to stay with the same insurer and most are even upgrading their covers with riders and higher sum insured.

What’s Behind the Surge

One of the biggest drivers of renewal stickiness has been the rise of modular, feature-rich health plans. Plans that come with cumulative bonus features, where the cover automatically grows every year, irrespective of claims, are proving especially attractive.

Says Jitin Jain, Head, Health Insurance, Policybazaar, “Renewals are at an all-time high because customers are beginning to see health insurance less as an obligation and more as an asset that grows with them. Modular products with cumulative bonuses and flexible riders are giving them reasons to stay invested year after year.”

For instance, in some policies, the sum insured can expand up to 10 times over a few years with around 10-15 per cent rise in premium. This not only strengthens long-term protection, but also lowers the effective cost per lakh rupee of coverage.

A Policybazaar analysis shows how a Rs 33,000 premium in 2025 buys Rs 10 lakh cover, but by 2030, for nearly the same premium band, the cover could go up to Rs 70 lakh, reducing the cost per Rs 5 lakh cover by over five times.

The report also notes that customers are now increasingly drawn to add-on riders at the time of renewal. Among the most popular are:

• Consumables cover (for gloves, syringes and other medical items not included in base plans)

• Critical illness benefit

• Daily cash allowance

• Bonus covers, which remain the most frequently attached rider during renewal

Lifestyle Diseases Change the Equation

The pandemic created awareness, but the continued rise of lifestyle-related illnesses, such as diabetes, hypertension, cholesterol issues, asthma, obesity, and heart disease has kept demand for health insurance strong.

The data notes that the share of customers with such conditions in its new business mix has gone up by 25 per cent in recent years.

As more families encounter these health concerns, they are less likely to discontinue their policies, seeing them instead as a core financial safety net.

Who Is Renewing More

The report highlights some clear patterns in renewal behaviour:

Age factor: People aged 30 and above dominate renewals, forming nearly 80 per cent of the consumer base.

Family floaters over individual covers: Family floater policies show slightly higher persistency.

High-sum insured: Policies with coverage above Rs 10 lakh are more likely to be renewed, the report notes, with persistency rising steadily as the sum insured increases.

Across geographies: Both metro and non-metro customers are showing equally strong renewal stickiness

A Shift in Mindset

Health insurance in India appears to be moving from a transactional purchase to a long-term financial strategy. With flexible, modular products, riders that provide 360-degree coverage, and cumulative bonus features that keep expanding the cover, policyholders are finding more reasons to continue with their plans.

This record-high renewal persistency may also indicate a more fundamental change: Indians are increasingly treating health insurance as an asset that grows over time, rather than a yearly expense.