Home loan insurance adoption increasing as borrowers seek protection from long-term liabilities: Report
New Delhi, June 9
Home loan insurance adoption in India has surged nearly seven times in the last five months, reflecting a growing shift among borrowers towards protecting their families from long-term loan liabilities, according to an analysis report by Policybazaar.
The report highlighted that homebuyers are increasingly viewing home loan insurance as a financial protection tool rather than a lender-bundled product, particularly as home loan ticket sizes and repayment tenures continue to rise.
According to the analysis, policy adoption has witnessed a sharp increase within a short period after launch, with volumes rising nearly sevenfold over the last five months.
The company said the trend indicates growing awareness among borrowers about safeguarding their families from outstanding home loan obligations in the event of an unforeseen disruption to income or life.
It stated, "Home loan insurance adoption has surged sharply within months of launch, with policy volumes rising nearly 7X in 5 months".
The report found that customers aged between 31 and 45 years account for nearly 70 per cent of all home loan insurance purchases. Within this category, borrowers aged 31-35 contribute around 22 per cent of purchases, those aged 36-40 account for 26 per cent, while the 41-45 age group contributes about 23 per cent.
Policybazaar noted that nearly 80-85 per cent of buyers are salaried professionals, indicating stronger adoption among income-stable households managing long-duration financial commitments.
The analysis also showed that larger loan sizes are driving greater insurance penetration. Around 40-45 per cent of insured borrowers have loan amounts between Rs 50 lakh and Rs 1 crore, while 20-25 per cent have loans above Rs 1 crore.
Nearly 8-10 per cent of insured borrowers have loan amounts of Rs 2 crore or more, while loans exceeding Rs 3 crore account for around 4-5 per cent of the insured borrower base.
Geographically, metro cities continue to dominate adoption, contributing nearly 70-75 per cent of total purchases. Delhi NCR accounts for 8-10 per cent of adoption, followed by Mumbai at 5-7 per cent, while Bengaluru, Lucknow and Pune each contribute around 3-5 per cent.
However, the report noted that demand from non-metro cities has accelerated over the last two months as awareness about the product spreads beyond major urban centres.
Commenting on the trend, Vivek Jain, Chief Business Officer of Life Insurance at Policybazaar, said, "The sharp rise in home loan insurance adoption reflects a clear behavioural shift among Indian borrowers, who are becoming far more conscious about protecting long-term financial liabilities."
According to the report, the rising adoption of home loan insurance reflects a broader shift among Indian borrowers towards structured financial planning and protection against long-term liabilities.
— ANI
Reader Comments
It's good that awareness is increasing, but the report says metro cities dominate 70-75% of purchases. What about smaller towns where home loans are also growing? The product needs to be made more accessible and affordable there, otherwise it's just another urban privilege.
I bought home loan insurance recently and honestly, the peace of mind is worth it. With EMIs stretching 20-30 years, you never know what life throws at you. My husband is 38 and we have a ₹60 lakh loan—this just makes sense. 👍
The 31-45 age group dominating 70% of purchases makes sense—that's when people are peak earning and taking big loans. But I hope insurance companies aren't charging exorbitant premiums just because demand is rising. Regulation needs to keep up! 🏠
Great to see this trend! My parents took a home loan in 2005 without any insurance and when dad passed away, the remaining amount was a huge burden. If this was available then, our lives would have been so different. Times are changing, and for the better. 🙏
I'm skeptical about these 'policy volumes rising 7X in 5 months' claims. Is it because more people are buying or because policies are cheaper now? The article should have mentioned premium trends. Still, any move towards financial protection is welcome. 🧐
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