Life insurance consumers are increasingly opting for higher sum assured policies, with the number of policies offering cover of more than ₹50 lakh rising 68% over the past five years, according to an analysis by the Insurance Information Bureau (IIB) based on life insurance business data for FY21–FY25.

The number of in-force policies with a sum assured exceeding ₹50 lakh increased from 4.4 million in FY21 to 7.4 million in FY25, generating an annual premium of ₹97,500 crore, the analysis showed. In contrast, the share of policies in the ₹2 lakh–₹5 lakh sum assured category increased by only 5.6 percentage points, while the ₹10 lakh–₹25 lakh category gained 2 percentage points.

“The IIB data clearly demonstrates that Indians who stay invested in life insurance increasingly recognise its value and strengthen their protection as their lives and responsibilities evolve,” Kamlesh Rao, Chairperson, Insurance Awareness Committee (IAC)- Life, said.

He said growing awareness of the importance of life insurance, rising incomes, inflation, and evolving life stages and responsibilities have all contributed to greater demand for comprehensive protection.

Nearly two-thirds (65.1%) of all in-force life insurance policies had a sum assured of ₹2 lakh or less in FY21. This ratio declined to 53.6% by FY25, indicating a gradual shift towards higher levels of protection.

The data also showed that policyholders are consistently investing more towards their financial protection. While the total number of in-force life insurance policies remained broadly stable at around 343 million over the five-year period, the average annual premium per policy increased 43% to ₹22,195 in FY25 from ₹15,567 in FY21.

“Together, these trends suggest that policyholders are strengthening their insurance cover over time rather than viewing life insurance as a one-time or tax-saving purchase,” the report said.