Home loan insurance is seeing rapid adoption, with policy uptake surging nearly sevenfold in the past five months, a Policy Bazaar report says. The sharp rise indicates growing awareness among borrowers about protecting their families from outstanding loan liabilities, especially as home loan amounts and repayment tenures continue to increase. Here’s look at the key findings:
Customers aged 31-45 lead adoption momentum
Policybazaar data indicates that home loan insurance adoption is being driven primarily by borrowers settled in their careers looking to purchase a house to fulfil their aspirations.
Customers aged 31–45 years account for nearly 70% of purchases, those aged 31–35 contribute ~22%, 36-40 26% and 41-45 around 23%.
The data further shows that nearly 80–85% of buyers are salaried professionals, underscoring stronger adoption among income-stable households managing long-duration liabilities.
Higher loan sizes driving greater Insurance penetration
Customers with larger loan liabilities are showing greater interest towards protection products
- 40–45% of insured borrowers have loan amounts between ₹50 lakh and ₹1 crore.
- 20–25% have loans above ₹1 crore.
- Nearly 8–10% of insured borrowers have loan amounts of ₹2 crore or more, while loans exceeding ₹3 crore account for ~4-5% of the insured borrower base.
- The average insured loan ticket size stands between ₹50–75 lakh.
- The average loan tenure selected by insured borrowers ranges between 12–15 years, highlighting the long-term nature of liabilities customers are seeking to safeguard.
The data also indicates that insurance adoption rises meaningfully with increasing loan value. As loan sizes grow, borrowers appear more conscious of the potential financial burden that could fall on their families in the event of an unforeseen loss of income or death
Metro cities dominate, but non-metros are catching up
Home loan insurance adoption remains concentrated in urban centres, with metros contributing nearly 70–75% of total purchases.
The top cities driving adoption include:
- Delhi NCR – 8-10%
- Mumbai – 5-7%
- Bengaluru – 3-5%
- Lucknow – 3-5%
- Pune – 3-5%
Early trends indicate that non-metro demand has begun accelerating over the last two months as awareness spreads beyond traditional urban markets.
This could signal the emergence of a broader protection-led housing finance ecosystem beyond Tier-1 cities
Joint borrowing and women’s participation increasing
Policybazaar’s data shows rising participation of women borrowers and co-applicants in home loan insurance purchases. Most insured home loans currently involve joint applications with spouses as co-applicants.
This trend points at the growing financial participation of dual-income households in home ownership decisions, while also increasing awareness around ensuring continuity of financial security for family members.