India’s affluent households are increasingly prioritising protection-led financial planning, with the high-net-worth individual (HNI) term insurance segment recording 100 per cent growth over the past two years, according to a study released by Policybazaar.
The report highlighted a structural shift in buying behaviour, with term insurance moving beyond tax-saving motivations to become a central component of wealth and risk management strategies. Over a five-year period, HNI term purchases have grown by more than 200 per cent, significantly outpacing the broader term insurance market, which expanded by around 50 per cent during the same period.
Younger Affluent Buyers Lead Growth
The surge in demand is being driven largely by younger high-income earners. Around 57 per cent of HNI buyers fall within the 30–39 age group, indicating that protection planning is increasingly aligned with peak earning years rather than late-stage wealth accumulation.
Buyers under 35 are emerging as a key growth driver, particularly for high-value policies. Demand for Rs 3 crore cover plans rose 45 per cent year-on-year, while average cover size among HNIs stood at Rs 2 crore, compared with Rs 1 crore for non-HNI buyers. About 5 per cent of affluent customers opted for policies exceeding Rs 5 crore, signalling the gradual mainstreaming of high-ticket protection products.
The trend reflects growing awareness around income replacement risk, lifestyle-linked liabilities and inflation-adjusted financial planning among affluent households.
Life Events And Income Profiles Shape Purchases
The report found that marriage has become the primary trigger for term insurance purchases among HNIs, replacing childbirth as the traditional starting point. Buyers are increasingly aligning protection decisions with early life-stage transitions, joint liabilities and long-term financial planning.
Corporate leaders and professionals account for the largest share of demand, with CXOs and senior corporate executives contributing 25–30 per cent of purchases. Doctors, lawyers and specialists account for another 20–25 per cent, followed by entrepreneurs and business owners. Startup founders and technology professionals are also emerging as a significant segment, reflecting the integration of insurance into new-economy wealth creation.
Income structure also influences cover size. Salaried HNIs opt for higher average coverage of around Rs 2 crore, compared with Rs 1.6 crore among self-employed individuals, suggesting a more income-linked approach to protection planning.
Tech Cities Drive Adoption
Technology hubs are leading adoption trends, with Bengaluru accounting for 16 per cent of HNI term demand, followed by Hyderabad at 9 per cent and Pune and Mumbai at 7 per cent each. Southern markets collectively contribute about 25 per cent of total demand, highlighting the link between technology-driven income growth and higher insurance penetration.
Varun Agarwal, Head of Term Insurance at Policybazaar, said affluent Indians are increasingly viewing term insurance as the starting point of financial planning rather than an afterthought. Younger buyers are entering earlier, opting for higher coverage and aligning protection with long-term liabilities and wealth continuity goals.
The findings suggest that as wealth creation expands across technology and entrepreneurial ecosystems, protection planning is evolving into a standard financial practice among India’s affluent population rather than a conservative or late-stage decision. |
