Whalesbook
Indian women are significantly increasing their uptake of insurance for financial security. However, this growing demand faces a major hurdle: medical inflation, which is rapidly outpacing the value of many policies. This situation leaves many women with coverage that is insufficient for today's rising healthcare costs.
Growing Demand for Protection
Women's interest in financial protection products is soaring. Bandhan Life saw its female policyholders in Eastern India jump from 12% in FY24 to 35% by FY26, with older women favoring savings plans. Younger women, meanwhile, are fueling demand for maternity and term insurance, making up 70% of term policy buyers under 35, according to Policybazaar. Over the past two years, women's term insurance purchases have risen 80%, with many choosing higher coverage amounts.
Medical Inflation Outpaces Coverage
This surge in purchases, however, occurs as India's medical inflation runs between 11.5% and 14% annually. These healthcare cost increases are far higher than general inflation, making treatments increasingly expensive and widening the gap between policy benefits and actual expenses. Data from Care Health Insurance showed a 37% rise in claims from women between FY25 and FY26, mainly from women aged 20-40, driven by higher maternity costs. The rate of C-sections, a significant cost driver, now exceeds 27%.
Insufficient Cover Leaves Women Vulnerable
A major concern is that most women remain significantly underinsured. A survey by TATA AIG found that 75% to 80% of women have health insurance below ₹20 lakh, which is often not enough for major illnesses like cancer or heart conditions. This gap is even wider for women over 45; only about 30% in this age group have health insurance, leaving them highly vulnerable as medical needs grow with age. Even coverage amounts that seemed adequate a few years ago may be insufficient today due to rising medical expenses. On top of this, out-of-pocket spending still covers nearly 40% of India's total healthcare costs, increasing financial strain, particularly for lower-income families.
Market Outlook and Insurer Adaptation
The broader Indian insurance market is expected to grow steadily, with health insurance projected to expand at roughly 7.2% annually from 2026 to 2030. Women are contributing to this growth, making up 21% of new retail policyholders at Star Health Insurance. Insurers are developing more targeted products for women, including enhanced maternity and newborn benefits and shorter waiting periods. Bandhan Life is also focusing on wealth-building options for older women, noting an increase in self-purchased policies which signals growing financial independence. Despite these challenges, the critical task for insurers will be balancing market growth with the essential need to ensure policy coverage keeps pace with rising healthcare costs, protecting policyholders from unexpected financial burdens.