Over half of young Indians drop health insurance within 3 years: Report

More than half of young Indians aged 24–34 who purchase health insurance drop out within the first three years, highlighting weak policy retention in the segment, according to a survey by Niva Bupa.


The survey found that 55% of policyholders in this age group who let their policies lapse do so within three years of purchase, suggesting that early adoption is often driven by short-term triggers rather than long-term risk planning.



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Despite growth in the sector, the number of people covered has remained largely stagnant. Health insurance premiums rose 9.1% to Rs 1.2 lakh crore in FY25, while the number of lives covered increased just 1.4% to 58 crore, the report said.


“What is even more telling is that most of them are not moving from one insurer to another. They are actually leaving the category altogether,” Nimish Agarwal of Niva Bupa was quoted as saying by The Times of India.


Affordability emerged as the biggest reason for policy lapses, with 46% of respondents citing it as a key factor.

Financial pressures also play a role, with 66% of those discontinuing policies having active loans, including 33% with personal loans and 17% with home loans.


As a result, insurance premiums are often among the first expenses to be cut when household budgets tighten.

Industry experts say this poses a challenge for insurers, as attracting and retaining younger policyholders is critical to maintaining a balanced risk pool over time.