How Indians Are Paying Insurance Premiums in 2025: In a rapidly digitizing economy, Indian policyholders are embracing modern payment methods to fulfill their insurance premium commitments. According to a new report by Policybazaar, UPI (Unified Payments Interface) has emerged as the most preferred method for paying insurance premiums in India. The report reveals that in FY25, UPI payments accounted for an impressive 33.7% of all insurance premium transactions on the platform, a significant jump from 27.9% recorded in FY24. This shift signals a major transformation in how Indians are choosing convenience and speed over traditional payment methods such as cash or cheques.
This increasing reliance on digital payment solutions is particularly evident in investment-linked insurance products, which saw a remarkable 45% surge in UPI usage. The ease of setting up auto-debit mandates and real-time payment processing are likely factors contributing to this trend. Health insurance, another major sector, has also witnessed a notable 34% increase in UPI payments. These now constitute a quarter of all digitally processed health premiums, further indicating a mass digital migration among policyholders.
Motor insurance continues to lead the charge in UPI adoption, with nearly half (50%) of all premiums being paid through this channel in FY25. Although the growth rate in this segment was relatively modest at 15%, the high adoption rate reflects a matured digital engagement. Even term insurance, a category with historically lower digital uptake, saw a significant 25% increase in UPI transactions. Around 36% of term insurance premiums were paid digitally via UPI, highlighting the widespread acceptance of this seamless payment option. Policybazaar Official Website
Who Can Apply?
Anyone holding an active insurance policy with a provider listed on Policybazaar or similar digital platforms can switch to digital modes of premium payment. This includes:
- Policyholders with life, health, motor, term, and investment-linked insurance
- First-time insurance buyers
- Renewing policyholders
Age, profession, or financial background does not restrict your eligibility to opt for digital payments.
Insurance Fees and Premium Breakdown
There are no additional charges for choosing UPI or credit card payments. However, here’s a typical breakdown:
| Type of Insurance | Average Annual Premium | UPI Payment Growth | Digital Payment Share |
|---|---|---|---|
| Investment-linked | INR 15,000 – 50,000 | 45% | 40% |
| Health Insurance | INR 10,000 – 25,000 | 34% | 25% |
| Motor Insurance | INR 5,000 – 15,000 | 15% | 50% |
| Term Insurance | INR 8,000 – 20,000 | 25% | 36% |
How to Use Digital Modes to Pay Insurance Premiums
Steps to Pay Insurance Premiums Digitally:
- Log in to your insurance provider’s official website or mobile app.
- Go to the ‘Pay Premium’ section.
- Choose your policy.
- Select a digital payment option: UPI, credit card, debit card, net banking, or wallet.
- Enter details and authenticate the transaction.
- Get instant confirmation via SMS/email.
Advantages of Digital Payment Modes:
- Instant confirmation
- No additional charges (in most cases)
- Safe and secure transactions
- Auto-debit and reminder setup
- Access to payment history and digital receipts
How to Apply for Insurance with Digital Payment Options
You can apply for a new policy and opt for digital payments simultaneously:
- Visit Policybazaar.com or your insurer’s site.
- Use the calculator to compare policies.
- Select the best plan based on features and affordability.
- Fill in KYC and personal details.
- Choose your payment mode (UPI recommended for speed).
- Receive policy documents digitally.
Important Dates
| Event | Date |
|---|---|
| FY24 Digital Payment Report | April 2024 |
| FY25 UPI Adoption Milestone | April 2025 |
| Next Payment Method Update | October 2025 (expected) |
Disclaimer
This article is for informational purposes only. It does not constitute financial advice or an endorsement of specific products or platforms. Please consult your insurance provider or a certified financial advisor for personalized assistance.
How Indians Are Paying Insurance Premiums in 2025 Conclusion
India’s digital payments revolution is undeniably influencing how insurance premiums are paid. With UPI at the forefront, policyholders now experience seamless, secure, and swift transactions. The remarkable increase in UPI usage across different insurance categories reflects a growing trust in the digital infrastructure.
Notably, the benefits extend beyond convenience. Policyholders enjoy enhanced control over payment schedules, immediate receipts, and the option to automate their payments. This digital transition also supports the government’s push towards a cashless economy.
As insurance providers continue to simplify user experiences and offer diverse payment methods, the adoption of UPI and other digital modes will only accelerate. This transformation is particularly important for increasing insurance penetration in underserved and remote areas.
Going forward, awareness and digital literacy will play crucial roles in maximizing the benefits of these payment systems. With proper implementation, this trend can redefine the insurance landscape in India.
How Indians Are Paying Insurance Premiums in 2025 FAQs
1: Why is UPI becoming the preferred method for insurance premium payments in India?
UPI offers instant, secure, and convenient transactions without additional charges. It eliminates the need for physical visits or paperwork, making it especially appealing for younger and tech-savvy policyholders.
2: Is there any risk involved in paying insurance premiums through UPI?
While UPI is generally safe, users should only transact via official apps and platforms. They must avoid sharing UPI PINs or personal information and activate two-factor authentication wherever possible.
3: Can I switch to digital payments for an existing insurance policy?
Yes, you can easily update your payment method through your insurance provider’s website or customer service. Many insurers also offer mobile apps for managing policies and payments.
4: What happens if my UPI transaction fails during a premium payment?
In case of failure, the amount is usually reversed to your bank account within 24–48 hours. You can also try alternate payment methods like credit/debit cards or contact customer support.
5: Are there any benefits of using a credit card over UPI for paying premiums?
Credit cards may offer reward points, cashback, or EMI options. However, they might incur service charges or interest if not paid on time. UPI remains the most cost-effective and fastest method for most users.
