India life insurance shows shift toward higher-value coverage

India's life insurance landscape is seeing a shift toward higher-value coverage, though low-value policies continue to dominate the market. Data from the Insurance Information Bureau (IIB) for FY2021 to FY2025 indicates that the number of in-force policies with a sum assured exceeding ₹50 lakh grew by 68%.

Despite this growth in high-value plans, policies with a sum assured of ₹2 lakh or less still represent over 53.6% of all in-force policies as of FY2025. The total number of in-force policies has remained relatively stable at approximately 343 million. However, the average annual premium per policy rose by nearly 43%, increasing from ₹15,567 in FY2021 to ₹22,195 by FY2025.

Financial experts note that the adequacy of life insurance depends on individual circumstances, including income, lifestyle, outstanding debts, and future obligations such as education and medical costs. While a ₹50 lakh cover is a common benchmark, its sufficiency varies based on a family's specific financial needs and rising living costs.