The findings were released in the Young India Health Insurance Report, based on a survey across more than 35 urban and rural locations, including Tier 1, Tier 2 and Tier 3 cities as well as villages.
The report was presented at an industry event hosted by Niva Bupa Health Insurance Company.
High intent, low ownership
According to the report, 51% of young Indians rank health insurance among their top three financial priorities. However, only 14% currently own a policy, indicating a significant gap between intent and adoption.
The study also finds that only 24% of respondents are adequately prepared for a medical emergency.
Health Protection Score indicates vulnerability
The report introduces a Health Protection Score (HPS), a composite measure that evaluates preparedness across four dimensions: lifestyle discipline, family health history, self-assessed health status, and financial adequacy.
Based on this framework, young India scores 4.54, with 76% of respondents falling in vulnerable categories. This includes 23% classified as highly vulnerable and 53% as somewhat vulnerable.
Perception of good health delays purchase
The findings suggest that perceived good health is a key factor delaying insurance adoption among younger consumers. Many respondents consider health insurance a later-life requirement rather than an immediate financial need.
The report also notes that liquidity preferences outweigh long-term protection in financial behaviour, with 26% prioritising liquidity compared to 8% focusing on protection-oriented planning.
Ownership linked to financial behaviour
The study indicates that health insurance ownership is more closely associated with financial discipline and structured planning than with income levels alone.
Policyholders show stronger financial planning behaviour, including diversification of investments and liability management.
Family protection and trust channels drive decisions
Rising healthcare costs and the need to protect family members remain key drivers for purchasing health insurance, particularly in smaller towns where insurance is viewed as a safety net for accessing quality healthcare.
While digital platforms support awareness, the report finds that final purchase decisions continue to be strongly influenced by human touchpoints such as family, friends, insurance agents, and bank representatives.
Retention challenges persist
The report highlights a 6% lapse rate among young policyholders, with nearly half exiting within three years.
Key reasons for discontinuation include premium affordability concerns, perceived low need due to good health, and preference for investment products offering returns. Around 34% of those who discontinued cited good health as the reason for dropping coverage, while 31% preferred investment-linked alternatives.
Confidence exceeds preparedness
The study also points to a confidence gap, with many respondents believing they are financially secure due to their current health status. However, actual preparedness for medical emergencies remains limited, particularly among those without insurance coverage.
