Rush to take Rs 1 crore health coveras premiums shed tax load

An increasing number of Indians are opting for health covers of ₹1 crore and above, multiple insurers told ET, as , zero taxes on policy premiums and greater awareness push buyers to secure the strongest possible shield against disease that money can buy. Insurers say this trend has accelerated following GST-related pricing changes, with customers willing to stretch premiums to secure higher benefits.

At standalone service provider , policies of ₹1 crore and above now account for about a quarter of new businesses in FY26, up 7–8 percentage points from last year due to continued upselling in the retail segment.

Premiums for a ₹1-crore cover range from ₹18,000 to ₹25,000 for a 35-year old male with no history of systemic comorbidities. “We are clearly seeing a trend of upselling where customers are opting for higher sum insured and riders,” said Nilesh Kambli, CFO, Star Health Insurance. “From a customer’s perspective, what earlier cost ₹118 now effectively costs ₹100, so they are willing to stretch a bit more for higher benefits.”

“On high-ticket policies, 1 crore-plus covers now account for about 25–30% of new business,” said Kambli.

He added that while the GST cut has played a role, the price differential between Rs 50 lakh and Rs 1 crore policies is not very significant, while treatment costs continue to rise.

Similarly, Niva Bupa has seen a sharp jump.

“We are seeing a decisive shift toward higher-ticket health insurance covers, particularly in the Rs 1 crore+ segment where, currently, more than 20% of our new business comes from such policies, up from 5% with a base sum insured of Rs 1 crore and above,” said a spokesperson at .

AFFORDABILITY QUOTIENT

The move toward larger covers is being aided in part by pricing dynamics. The differential in premium between mid-sized covers such as Rs 50 lakh and Rs 1 crore policies has narrowed, making higher coverage more accessible. Customers are also opting for add-on benefits, contributing to a 3–4% improvement in portfolio yields.

, which has about a 9% share of the health insurance market, is also seeing customers shift toward higher sum insured.

“We are seeing an increase in people asking for higher sum assured of Rs 1 crore and even Rs 5–10 crore global policies,” said Parthanil Ghosh, MD and CEO, HDFC Ergo. “The GST-related pricing impact has also nudged this shift, as customers feel that if they were earlier spending Rs 100, they can now stretch that to get 20–30% higher coverage.”