Accident And Illness Riders Surge As Indians Upgrade Their Term Covers: Report

A quiet yet meaningful shift is reshaping India’s term insurance market. Once seen primarily as a death benefit instrument, term plans are now morphing into comprehensive protection solutions — safeguarding not just life but also income, health, and long-term well-being.

A new report from Policybazaar says India’s term insurance landscape is undergoing a noticeable shift, with more policy buyers now upgrading from basic life cover to protection-heavy term plans that include riders such as Accidental Death Benefit (ADB) and Critical Illness (CI) riders.

South’s Strong Lead: Protection Mindset Redefined

From Hyderabad to Kochi, the southern belt has emerged as India’s new hub for holistic term protection. Nearly half of all term insurance buyers here opt for at least one rider — be it for accidental death, total permanent disability, or critical illness. Hyderabad alone reports a remarkable 52–56 percent rider attachment, underlining its reputation as the country’s most protection-conscious city.

Policybazaar data shows that the region averages a 45–47 percent rider penetration rate, far higher than the national average. This growth is driven by metros and rising Tier 2 markets where younger, affluent professionals are increasingly aware of lifestyle risks and are structuring their policy portfolios accordingly.

Gender Insight: Women Drive Health-Linked Protection

According to insights, men and women choose riders differently: women showed a strong preference for Critical Illness riders, especially those offering coverage for cancer-related conditions and long-term health protection. Men, on the other hand, are more inclined towards Accidental Death Benefit (ADB) and Accidental Total and Permanent Disability (ATPD) riders. These riders provide support during high-impact emergencies. This finding reflects different financial concerns where women focus more on health-specific risks, while men worry about accident-related risks.

CI Riders Rise with Higher Cover and Younger Buyers

As Indians opt for larger life covers, the preference tilts toward Critical Illness riders over Accidental Death Benefit options. Among affluent, salaried individuals in metros, this rider has become synonymous with long-term security against lifestyle-related diseases. Hyderabad (12–13 percent) and Bengaluru (10–11 percent) showcase this strong attachment, while Kochi (9–12 percent) and Mumbai (7–10 percent) mirror similar awareness trends.

This shift reflects a growing understanding that medical setbacks can impact earning potential as severely as mortality risks — and financial preparedness must address both.

NRI Focus: Disability Protection Takes Center Stage

Outside India, the NRI segment mirrors this risk-aware evolution with an even sharper focus. Nearly 42 percent of non-resident term plan holders opt for the ATPD rider — the highest among all buyer groups. This indicates a sophisticated approach toward long-term risk planning, where protection against disability is deemed as vital as life coverage itself.

Overall, ATPD remains the most popular rider nationally, maintaining steady attachment rates above 21 percent through 2025.

Industry Insight: Toward Comprehensive Financial Security

Commenting on the findings, Varun Agarwal, Business Head – Term Insurance, Policybazaar.com, noted that people are now looking beyond the base death benefit. “Our data reveals a definitive market movement toward comprehensive term protection in India. Consumers today are prioritising financial security against income loss due to disability and critical illness equally over the base death benefit. As term insurance evolves, riders like Accidental Death Benefit and Critical Illness riders are clearly moving from optional add-ons to essential tools for securing a family’s financial future.”

The Broader Picture

India’s term insurance industry is no longer about one-dimensional life protection. The evolving customer — younger, urban, and financially literate — seeks stability against every potential disruption. Whether it’s critical illness, disability, or income interruption, the future of protection in India is layered, customizable, and deeply holistic.