A new study by employee health insurance platform Plum has revealed that Indians continue to treat insurance as a reactive purchase, often waiting for major life events or emergencies before securing personal coverage. The research, which analyzed over 10,000 personal insurance consultations and surveyed more than 350 respondents, shows that while employer-sponsored health insurance has raised awareness, it has also highlighted significant gaps in personal insurance adoption.
According to Plum’s findings, 59% of employees surveyed do not own a personal health policy and depend entirely on their employer’s group insurance for protection. For many, this marks their first brush with insurance. A smooth claims process often prompts further interest—40% of policies booked through Plum in the last six months were purchased after employees made a claim under their employer’s coverage.
Group health insurance has emerged as a growth driver for the sector. Data from the IRDAI handbook indicates that employer-sponsored schemes are expanding at an annual rate of 20%, even as the retail policy segment struggles to gain traction.
However, delaying the purchase of individual health cover has serious drawbacks. In the last six months, 54% of Plum’s personal insurance consultations resulted in either policy rejection or higher premiums. Insurers rejected 20% of applications outright due to high health risks, while another 34% faced premium hikes of 10–50% because of pre-existing conditions like diabetes or hypertension. “This is particularly concerning as 71% of India’s workforce is already at risk of chronic disease,” Plum noted in its Employee Health Report 2025.
Maternity coverage is another pain point. The study found that 90% of users requesting maternity add-ons did not proceed because of two-year waiting periods, even though most were already planning or expecting.
Once Indians do decide to buy personal cover, their choices reveal evolving priorities. Floater plans for self and family account for 42% of purchases, while 30% opt for individual policies. Encouragingly, 95% of buyers now select a sum insured of ₹10 lakh or more, reflecting growing awareness of rising healthcare costs. Parental insurance is also a strong motivator—23% of customers purchase policies specifically for parents, while a quarter of millennials under 30 place parental coverage ahead of individual protection. About 21% of consultations involved porting existing policies due to dissatisfaction with current benefits.
Despite this positive shift, the study emphasizes that India’s mindset toward insurance remains largely reactive. More than half (52%) of respondents admitted they sought insurance only after a major life event such as marriage, career change, or a health scare. Experts stress that while group insurance has helped improve awareness, converting this initial exposure into timely personal coverage is critical. Without it, many Indians risk realizing the importance of insurance too late—when exclusions, premium loading, or outright rejections have already set in.