Tier 2 and Tier 3 cities now dominate India's health insurance landscape, accounting for 62% of all new policies issued in 2025–26, according to data from Policybazaar. The shift reflects rising health awareness and affordability in smaller cities.
Key Highlights: Sum insured in the Rs 10–15 lakh range has become the most common band, overtaking the Rs 5–10 lakh segment. In Tier-2 cities, policies in the Rs 10–14 lakh range rose from 27% to 47% of new policies. Rising hospitalisation costs and awareness of underinsurance are driving the shift towards higher coverage.
Sources: Policybazaar Health Insurance Report 2025–26, BW Businessworld (January 2026)