Summary of this article
HNI term bookings doubled, average cover rose 30 per cent.
Buyers below 35 are driving HNI insurance demand.
Rs 3 crore-plus policies recorded 25 per cent growth.
Term insurance is no longer limited to senior, wealthy individuals, with younger high networth individuals (HNIs) also entering the market for bigger life covers. Buyers below 35 have emerged as a key growth group, with bookings of term insurance policies among HNIs in this age group doubling since April 2023, with the average sum assured also increasing by 30 per cent, according to data from Policybazaar.
Younger HNIs Account For A Key Share Of Growth
People below the age of 35 have emerged as a key group in HNI term insurance purchases, pointing to younger affluent individuals entering the market for high value life insurance at an earlier age.
The growth has not come only from existing policyholders adding to their cover. New buyers in the younger age group have also contributed to the rise in bookings, the data showed.
Demand For Multi-Crore Life Covers
The number of HNI policies offering a life cover of Rs 3 crore or more has increased by 25 per cent. Around 5 per cent of HNI buyers have opted for covers of Rs 5 crore or more. Policies with a cover of Rs 7 crore or above accounted for 1.50 per cent of buyers, while 1 per cent chose covers of Rs 10 crore or more, the data showed.
Among salaried HNI customers, the average sum assured was around Rs 2 crore. The highest life cover purchased by an HNI customer on the platform stood at Rs 25 crore.
Critical Illness And Disability Riders
Some HNI customers also opted for additional riders along with their basic life cover. Accidental total and permanent disability (ATPD) cover accounted for 20 per cent of rider choices, followed by critical illness cover at 15 per cent. Accidental death benefit accounted for 9 per cent, while 8 per cent of customers opted for waiver of premium (WOP).
Bengaluru And Hyderabad Lead In Policy Demand
Bengaluru and Hyderabad recorded the highest demand for HNI term insurance policies, while Mumbai, Gurugram, Faridabad and Bengaluru ranked among the cities with the highest average sum assured.
Men accounted for 82 per cent of HNI term insurance buyers, while women made up the remaining 18 per cent, according to last year’s figures.
Most HNIs Choose Limited Pay Options
The data further revealed that less than 5 per cent of HNI customers had opted for term return of premium (TROP) plans. These policies refund the premiums paid if the policyholder survives the policy term.
Around 40 per cent of HNI customers chose regular premium payments. The majority opted for limited-pay plans or policies that required premium payments only till the age of 60.
