Policybazaar: Tier II/III Cities Drive 62% of New Health Policy Sales

• Health policy sales in Tier II and Tier III cities are projected to be robust in FY26, contributing 62% of new policies sold by November 2025.
• Nearly half of new policies in Tier II and III cities opt for a sum insured of Rs 10-15 lakh, with over 40% of Tier III insured using EMIs for premiums.
• Add-on adoption for health policies surged significantly across all tiers in FY26, driven by GST relaxation on premiums.
• Family floater plans show the highest adoption in Tier II (69%) and Tier III (59%) cities, reflecting multi-generational household structures.
• Hospitalization accounts for 80.70% of claims in Tier II and Tier III cities, indicating primary use for inpatient care.

Why It Matters: Health insurance boom in smaller cities means more Indians are getting protected.