India life insurance coverage trends show shift to higher sum assured

Data from the Insurance Information Bureau (IIB) of India indicates a significant shift in the country’s life insurance landscape between FY2021 and FY2025. Policyholders are increasingly opting for higher levels of coverage, reflecting a trend toward enhanced financial protection.

Analysis shows that the number of policies with a sum assured exceeding ₹50 lakh grew by 68%, rising from 4.4 million in FY2021 to 7.4 million in FY2025. This segment generated an annual premium of ₹975 billion. Consequently, the proportion of in-force policies with a sum assured of ₹2 lakh or less declined from 65.1% in FY2021 to 53.6% by FY2025.

While the total number of in-force life insurance policies remained stable at approximately 343 million, the average annual premium per policy saw a 42.6% increase, rising from ₹15,567 in FY2021 to ₹22,195 in FY2025.