A fundamental transformation is reshaping India's health insurance landscape. The traditional view of insurance as a safety net solely for hospitalisation is rapidly fading, replaced by a new 'consumption-first' paradigm where policyholders seek value they can use in real-time. This significant shift is highlighted in a recent report by Policybazaar, which analysed a vast number of policies over a year.
Key Insights: Maternity, OPD, and Health Wallets Lead the Change
The report uncovers several powerful trends driven by younger, digitally-savvy consumers. Most strikingly, the adoption of maternity covers skyrocketed by 150-180% year-on-year. This surge is largely powered by first-time buyers, with 96% of maternity policy purchasers being new entrants to health insurance. The driving force behind this is clear: soaring childbirth costs. A normal delivery can cost between ₹25,000 and ₹50,000 in Tier I cities, while a Caesarean section ranges from ₹78,000 to a staggering ₹1 lakh.
Simultaneously, Outpatient Department (OPD) covers maintained a robust position, accounting for 10–15% of all policies sold and demonstrating a strong 40% utilisation rate. This segment is primarily driven by households with recurring monthly medical expenses. The largest group opting for OPD are policyholders aged 45 to 60 years (31.6%), followed closely by the health-conscious 18 to 35 age bracket (21.8%).
The demographic profile of the new-age insurance buyer is distinct. Over 75% of buyers are aged between 18 and 35 years, and a overwhelming 84.4% are women, indicating who is making the key financial decisions for family healthcare.
Health Wallets: The Next Wave in Healthcare Budgeting
Emerging as a significant innovation, Health Wallets are poised to be the next major consumption wave. They address three critical needs: pre-funding for OPD costs, covering non-payable expenses, and providing reward-backed renewal support. Their early traction is notable, and 8% of customers buying maternity covers also opt for a Health Wallet add-on. This signals a growing willingness among young, financially prudent families to adopt tools that manage and smooth out overall medical spending, not just hospitalisation bills.
The Future is Consumption-Led
Commenting on the trends and looking ahead to 2026, Siddharth Singhal, Head of Health Insurance at Policybazaar, stated, "As we look ahead, it’s clear that India’s health insurance industry is entering a consumption-first era. OPD will increasingly become a non-negotiable part of every health plan, as consumers seek value they can use throughout the year. Maternity covers will continue to bring in a large share of new buyers. We also expect Health Wallet models to grow rapidly, as they mirror the way households prefer to manage healthcare budgets - through prepayment, reward accumulation, and reuse."
The report conclusively indicates that the Indian health insurance market is moving beyond mere indemnity. Today's consumer, especially the younger generation, demands tangible, year-round value, flexibility, and control over their healthcare spending, heralding a new era of preventive and managed care financing.
