Home Innovation Payment and Card UPI Leads as Preferred Insuran...

UPI Leads as Preferred Insurance Payment Mode, Credit Cards Make Strong Return

Payment and Card

Business Honor
27 May, 2025

Digital shift grows as Indians choose flexible, rewarding ways to pay insurance premiums.

The method of Indians paying their insurance premiums is changing rapidly, with digital modes such as UPI and credit cards becoming increasingly popular. Based on data from Policybazaar, UPI is being utilized for a third of all insurance premium payments. Its adoption in investment-linked insurance products has increased by more than 45%, indicating people are placing their faith in UPI for significant financial decisions.

Credit cards too are making a strong comeback, particularly for term insurance, whose usage has grown by 127% over the previous year. For investment-cum-insurance schemes, the increase is even more pointed, nearly 300%. Individuals appear to like credit cards because they provide rewards and money flexibility.

The start of the year, particularly the first quarter that includes the tax period between January and March, registered a 15% increase in online premium payments. People are increasingly choosing monthly payment schemes. Monthly payments for health insurance premiums have increased over 300%, indicating a trend towards convenient and flexible payment methods.

UPI contribution to insurance payouts on Policybazaar increased from 27.93% in FY'24 to 33.71% in FY'25. It is particularly popular among insurance-cum-investment products and health insurance. Even motor and term insurance are seeing UPI adoption picking up pace.

Net banking, while less discussed, is also on the rise, with a virtual 300% rise in usage for investment and term plans. In the case of NRIs, credit cards remain the most preferred, especially for health insurance, though debit card usage among them is gradually on the rise.

This digital revolution reflects, says Policybazaar, that customers are not only turning online but also getting smarter in how they shop around and plan their insurance payments.