The insurance sector in India has observed several notable trends this year. According to a recent report, health insurance claims in the country have increased by 30% over the past three years. This growth can be attributed to rising medical costs, seasonal illnesses, and chronic conditions like diabetes and cancer.
The report compiled by Policybazaar revealed that heart disease accounts for a significant portion (25–30%) of term insurance claims. These trends underscore the escalating healthcare expenses in India and the growing reliance on insurance to manage these costs. Additionally, there has been a notable surge in health insurance claims due to the higher payouts for term insurance policies linked to heart diseases.
Seasonal illnesses like fever and viral infections tend to peak during the monsoon and winter months, while chronic conditions such as heart disease, diabetes, and cancer are on the rise across all age groups.
“The rising cost of healthcare is putting a strain on people’s pockets. For many families, a single hospitalisation can result in substantial financial strain, depleting years of savings or forcing them to take loans. This is particularly evident in urban areas like Delhi and Maharashtra, where higher costs of advanced medical facilities have led to average claims exceeding Rs 1 lakh,” said Siddharth Singhal, Head of Health Insurance, Policybazaar.
Health insurance and claim payout
According to Policybazaar, there has been a consistent increase in the average claim payout from Rs 62,014 in FY23 to Rs 81,025 in FY25. This upward trend suggests a rise in healthcare expenses and greater medical costs being claimed by policyholders. The surge in payouts is attributed to the growing prevalence of chronic illnesses like heart disease, diabetes, and cancer, as well as seasonal ailments
The average claim payout numbers:
FY23: Rs 62,014
FY24: Rs 70,152
FY25: Rs 81,025
Claims frequency on the rise
The increasing prevalence of this tendency suggests that an expanding number of insurance holders are availing their health insurance privileges, potentially due to heightened awareness of their coverage and improved availability of healthcare services. The number of claims has been steadily rising over the past three years, indicating a higher utilization of health insurance benefits.
Financial Year Claims Frequency
FY23 4.90%
FY24 5.26%
FY25 6.39%
Heart diseases lead the claims
Term insurance claims are predominantly characterized by heart diseases, making up 25-30% of total claims. Natural deaths account for 30-35% of claims, while accident-related claims stand at approximately 15-20%. The impact of Covid-19 is evident in the rising number of related claims, reflecting the ongoing influence of the pandemic on life insurance trends.
Male policyholders constitute the majority of term insurance claims, with 90% being attributed to them. This is mainly due to higher mortality rates among men and a higher prevalence of term insurance policies among male policyholders.
In terms of geographical distribution, urban areas such as Maharashtra, Uttar Pradesh, Delhi, Karnataka, and Gujarat report a higher volume of term insurance claims. This can be attributed to a greater awareness of life insurance products and improved access to financial services in these regions.
According to Policybazaar, approximately 35-40% of policyholders are choosing to include riders such as critical illness and accidental death benefits, indicating a growing interest in additional protection for unexpected circumstances.