HNI Term Insurance 2026: India's wealthy individuals are increasingly recognising the importance of protecting their families against unexpected financial risks. A new trend in the insurance industry shows that high-net-worth individuals (HNIs) are purchasing larger term life insurance policies, with younger buyers playing a particularly important role in this growth.

According to data shared by online insurance marketplace Policybazaar, term insurance bookings among HNI customers have increased by 100% since April 2023. During the same period, the average life insurance coverage purchased by these customers has risen by approximately 30%.

One of the most interesting findings is that around half of HNI term insurance buyers are below 35 years of age. This suggests that younger affluent Indians are incorporating financial protection into their long-term planning much earlier in life.

Young Wealthy Indians Are Driving Term Insurance Growth

Traditionally, large life insurance policies were often associated with middle-aged individuals who had accumulated substantial assets and family responsibilities.

However, Policybazaar's figures indicate a noticeable change in this pattern.

Approximately 50% of wealthy customers purchasing term insurance through the platform are younger than 35.

This younger generation of high-income professionals, entrepreneurs and business owners appears increasingly interested in protecting family finances from an early stage.

Rather than waiting until later in their careers, many are selecting substantial life insurance coverage while building their financial portfolios.

The reported increase is also being supported by new customers entering the term insurance market, rather than depending entirely on existing policyholders increasing their coverage.

Demand for Multi-Crore Life Insurance Policies Is Rising

Another major development is the growing preference for high-value life insurance coverage.

Wealthy households often have financial commitments that differ significantly from those of average-income families. These may include housing loans, business liabilities, children's education, household expenses and long-term financial obligations.

Consequently, many HNI customers are choosing policies with coverage worth several crores.

Policybazaar's data provides the following breakdown:

These figures indicate that one in four HNI customers covered in the platform's analysis purchased life insurance protection of at least ₹3 crore.

Meanwhile, approximately 5% selected policies providing ₹5 crore or more in coverage.

The average coverage among affluent salaried customers was reported to be around ₹2 crore.

Policybazaar also reported that the largest individual term insurance cover purchased through its platform reached ₹25 crore.

High-Value Term Insurance Purchases Have Increased Sharply

The demand for policies offering more than ₹5 crore in life coverage has reportedly increased nearly threefold following tax-related changes and insurance sector reforms.

For affluent households, a large insurance payout can help dependants manage outstanding liabilities and maintain financial stability following the death of the insured person.

However, the appropriate insurance amount depends on individual circumstances.

A person with substantial loans, dependent family members and long-term expenses may require more coverage than someone with limited financial obligations and considerable liquid assets.

Financial planners generally recommend evaluating liabilities, future family expenses, existing investments and available insurance before deciding on the sum assured.

Wealthy Buyers Prefer Pure Term Insurance Over Premium-Return Plans

Policybazaar's findings also highlight an interesting change in product preferences.

Fewer than 5% of HNI term insurance customers reportedly selected Term Return of Premium (TROP) policies.

Under a conventional pure term insurance plan, the insurer pays the agreed death benefit if the insured person dies during the policy term, subject to policy conditions.

If the insured survives the policy period, a standard pure term plan generally does not provide a maturity payout.

A return-of-premium term plan, on the other hand, offers repayment of specified premiums upon survival until maturity, subject to its terms and exclusions.

Such plans generally have higher premiums than comparable pure protection policies.

The limited preference for TROP products suggests that many wealthy customers are primarily purchasing term insurance for financial protection rather than treating it as a savings product.

Limited Premium Payment Options Are Becoming Popular

Another important finding concerns how wealthy customers prefer to pay their insurance premiums.

Nearly 60% of HNI customers reportedly selected limited-payment or pay-until-60 options.

Under a limited-premium payment arrangement, policyholders complete their premium obligations within a specified period while the life insurance coverage continues for the chosen policy term, provided all conditions are satisfied.

For example, an individual may choose a policy providing coverage until age 75 but complete premium payments much earlier.

This structure may appeal to people who want to reduce financial commitments after retirement.

However, limited-payment policies can involve higher premiums during the payment years than regular-payment alternatives.

Customers should compare the total premium cost, payment affordability and policy conditions before selecting an option.

Critical Illness and Disability Protection Gain Importance

High-net-worth customers are also showing interest in additional insurance benefits that extend beyond basic death coverage.

According to the reported data, approximately 20% of HNI term insurance buyers selected accidental disability protection.

Another 15% opted for critical illness-related riders.

These additional benefits can provide financial assistance when specified events occur, depending on the rider's coverage conditions.

For example, an accidental disability rider may offer a benefit if the insured suffers a qualifying disability resulting from an accident.

A critical illness rider may provide a lump-sum payout following the diagnosis of a covered serious medical condition, subject to waiting periods, exclusions and other requirements.

Such riders generally involve additional costs and should be evaluated carefully.

Bengaluru and Hyderabad Lead in Policy Purchases

The report also identifies important geographical patterns in the growing HNI term insurance market.

Bengaluru and Hyderabad emerged as leading cities in terms of the number of policies purchased through Policybazaar.

Both cities have substantial populations of technology professionals, entrepreneurs and high-income employees.

Meanwhile, Mumbai, Gurugram, Faridabad and Bengaluru were among the locations where customers purchased policies with relatively high average sums assured.

These trends suggest that demand for large insurance covers is particularly visible in major business centres and high-income urban markets.

However, the findings represent activity recorded on Policybazaar's platform and should not automatically be interpreted as the complete picture of India's insurance market.

Women Account for 18% of HNI Term Insurance Buyers

Women are also participating in the growing market for high-value life insurance protection.

According to the platform's figures, approximately 18% of HNI term insurance customers were women.

The data reflects participation by affluent women in insurance purchasing and household financial protection.

As more women build independent careers, operate businesses and contribute to family income, life insurance can form an important part of their personal financial planning.

Coverage requirements should be assessed according to financial responsibilities rather than gender alone.

What Policybazaar Says About the Growing Trend

Varun Agarwal, Head of Term Insurance at Policybazaar, highlighted the increasing preference for substantial financial protection among wealthy Indian customers.

According to the company's assessment, the doubling of HNI term insurance bookings since April 2023, combined with the large proportion of customers below 35, reflects growing interest in securing family finances at a younger age.

The increase in average policy coverage also suggests that customers are evaluating their protection requirements against larger financial responsibilities.

How Much Term Insurance Coverage Should You Buy?

Although multi-crore insurance policies are becoming more common among wealthy customers, choosing a high sum assured should not be based on trends alone.

Individuals should consider their annual household expenditure, outstanding loans, financial dependants, future education costs and existing savings.

The duration of coverage is equally important.

Someone with young children and long-term financial commitments may need protection for a different period than a person approaching retirement with limited liabilities.

Customers should also compare premiums, insurer disclosures, claim-related information, exclusions and available riders.

Importantly, purchasing insurance early can sometimes help secure more affordable premiums, although the actual cost depends on age, health, lifestyle, coverage and underwriting requirements.

Why Term Insurance Is Becoming Important in Wealth Planning

The growing interest in term insurance among affluent Indians reflects a broader focus on financial security.

While investments and business assets may help families accumulate wealth, life insurance serves a different purpose by providing a specified financial benefit following the insured person's death during the covered period.

For families dependent on a primary earner, appropriate insurance protection can help reduce the financial impact of an unexpected loss.

The latest Policybazaar data indicates that younger wealthy customers are increasingly considering this protection alongside their investments and other financial commitments.

With HNI term insurance bookings reportedly doubling and average coverage rising by 30%, the company's findings point towards greater awareness of life insurance among affluent buyers.

Nevertheless, selecting the right policy requires careful evaluation of individual needs, affordability and contractual terms rather than simply choosing the largest available cover.

Disclaimer: This article is intended for general information and educational purposes only. Insurance premiums, coverage, benefits and eligibility depend on individual circumstances and insurer terms. Readers should carefully review policy documents and consult a qualified insurance adviser before purchasing a plan.