Policybazaar Sees Health Premiums Rise as Zero GST Fuels NRI Demand

(INDIA) — India’s health insurance premiums surged 27.17% year-on-year in January 2026 to ₹5,414.54 crore (INR54.15 billion or $600 million), driven by zero GST on individual health policies and a 126% jump in purchases by non-resident Indians.

The rise outpaced the broader non-life market, where premiums increased 14.9% to INR33,346.3 crore ($3.67 billion).

General insurers recorded 20.4% growth to ₹21.88 billion in January, while standalone health insurers grew 32.3% to ₹32.26 billion.

Government schemes contributed ₹24.80 billion in premiums, up from ₹18 billion in January 2025, while private insurers saw 17% growth to ₹17.4 billion and public sector insurers declined 3% year-on-year.

The premium surge comes as Indian insurers and online distributors report that non-resident Indians are increasingly buying Indian health cover for family members at home, and also for their own planned care.

Policybazaar reported 126% year-on-year growth in NRI health insurance purchases as of January 2026, linking the jump to cost differences, easier onboarding, and a widening set of use cases.

Demand skewed heavily toward the Gulf, where UAE, Saudi Arabia and Kuwait accounted for 50% of purchases, Policybazaar said, citing shorter travel times and lower costs.

Indian policies priced at $120–$300 annually compare with $2,000–$3,000 in the Gulf, offering up to 40% savings, the company said.

Europe contributed 25% of demand, which Policybazaar tied to long waits for procedures such as cataracts and joint replacements.

US and Canadian buyers accounted for 17% of demand, while other regions made up 8%, Policybazaar said.

The shift has pushed more non-resident Indians toward products that work across family structures and longer time horizons, including floater and parental policies.

Policybazaar said 70% of NRI buyers opted for higher sum insured, while multi-year policies rose 19% as customers sought premium lock-ins against medical inflation.

Insurers and distributors also pointed to the growing role of technology in enabling these purchases from abroad, including AI-enabled tele-checkups and digital onboarding.

Siddharth Singhal, Business Head–Health Insurance at Policybazaar, said: “Technology has effectively dissolved geographical barriers to healthcare, enabling NRIs to use Indian health insurance not just for emergencies but also for preventive care, planned treatments and long-term health management.”

Alongside NRI demand, the removal of tax on individual policies has become a central factor behind January’s premium growth.

Zero GST on individual health insurance, effective recently, boosted standalone insurers by 23% year-on-year, supported by greater awareness and government schemes.

The tax change reduced costs for policyholders, helping accelerate sales even as medical inflation remains high.

Medical inflation in India runs at 12–15% annually, described as one of Asia’s highest, adding pressure to both claims experience and the affordability of future renewals.

Insurance coverage doubled to 573 million people by 2023–24, but penetration remains at 40–42%, highlighting the gap between the number of covered lives and the broader population.

For insurers, January’s premium growth reflected a mix of private demand and public programmes, with government schemes contributing ₹24.80 billion and private insurers expanding 17% to ₹17.4 billion.

At the same time, the 3% year-on-year decline in public sector insurers contrasted with growth elsewhere, underscoring the uneven pace of expansion across insurer types.

While January showed rapid premium growth, the industry still faces questions around pricing and sustainability, especially as claims rise and hospital costs climb.

Experts cited ongoing premium hikes of 10–15% projected for 2025 due to rising claims and hospital bills, even as the market absorbs the effects of zero GST and rising NRI participation.

Budget 2026 discussions have included proposals for higher tax deductions, a GST review on room rents, and standardized pricing, reflecting a broader debate about how to curb costs and improve transparency.

Debasish Banerjee, Partner at Deloitte India, said: “Medical inflation in India is among the highest globally. Without significant, timely, and coordinated regulatory interventions, this trend is likely to continue.”

For policy buyers, the January figures highlight a market pulling in two directions at once: lower tax on some products on one hand, and persistent cost inflation on the other.

Non-resident Indians increasingly use Indian health insurance for emergencies, preventive care, and long-term management, a shift Policybazaar tied to the spread of digital servicing and remote medical assessments.

Digital onboarding and AI-enabled tele-checkups have widened access for non-resident Indians, while the removal of GST on select NRI policies has added to the appeal for buyers comparing options across countries.

The price gap remains the clearest driver in the Gulf, where annual costs cited by Policybazaar ranged from $2,000–$3,000 compared with $120–$300 for Indian policies.

In Europe, Policybazaar linked demand to long waits for procedures such as cataracts and joint replacements, with some buyers turning to Indian coverage as part of a planned-treatment approach.

The tilt toward higher sum insured and more multi-year policies suggests buyers are not treating the purchases as short-term travel add-ons, but as longer-term cover aligned with medical inflation and family needs.

Insurers, online distributors and policyholders now face a market shaped by rapidly rising premiums in the health segment, steady expansion in overall non-life premiums, and policy shifts such as zero GST that can quickly change buying behaviour.

Banerjee said regulatory action would shape whether India can contain medical inflation, while Singhal pointed to technology’s role in letting non-resident Indians use Indian health insurance beyond emergency situations.