International travel insurance adoption among Indian travellers rose 22% year-on-year in 2026, according to Policybazaar.com, as concerns around medical emergencies, flight disruptions, geopolitical tensions, and evacuation risks increasingly shape overseas travel decisions.

At the same time, industry experts say a large protection gap still exists despite growing awareness. According to Dev Karvat, Founder & CEO of global travel assistance and insurance company Asego, nearly 82% of Indian outbound travellers still do not opt for travel protection unless it is mandatory for visa approval.

The contrasting trends highlight how global uncertainty is changing travel behaviour among Indians, pushing many travellers toward nearby destinations and stronger insurance coverage, while a majority still remain underinsured.

International destinations

According to Policybazaar.com data, Indian travellers are increasingly preferring short-haul destinations across Asia-Pacific over expensive or geopolitically sensitive long-haul markets.

Japan emerged as the fastest-growing destination in 2026, recording a 17% rise in bookings among Indian travellers. Thailand followed with a 12% increase, while Vietnam saw bookings rise 7%. Singapore and Malaysia continued to witness stable demand, while Sri Lanka gained traction as a cost-effective international destination.

In contrast, outbound travel to the UAE declined sharply by more than 70%, largely due to regional tensions and safety concerns. Travel demand to Europe and the United States also softened amid elevated airfares, airspace restrictions, and longer travel routes.

The shift reflects how geopolitical uncertainty is increasingly influencing destination choices, travel duration, and spending patterns.

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Medical and disruption-related protection

The uncertainty is also changing how travellers purchase insurance. Policybazaar data showed that the number of travellers opting for coverage above $250,000 has doubled compared to previous years, indicating rising concern around overseas medical costs and emergency evacuation expenses.

Medical coverage remains the most preferred feature, chosen by nearly 75% of travellers. This is followed by trip cancellation cover at around 50% and evacuation cover at approximately 40%.

Demand is also increasing for flight delay protection, baggage loss coverage, rerouting assistance, and missed connection support.

Karvat said recent travel disruptions have made these add-on protections far more relevant for international travellers.
“Coverage for flight delays, missed connections, and baggage issues have become particularly relevant,” he said.

According to him, travellers heading to Middle East destinations continue to prefer shorter vacations, with nearly 50% opting for travel insurance coverage of up to two weeks. The 9–14 day segment alone accounts for around 27% of policy purchases.

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Basic coverage

Despite growing risk awareness, affordability remains a major factor in insurance decisions. Karvat said nearly 57% of travellers still opt for base-level travel insurance coverage of up to USD 75,000. Meanwhile, around 22% choose mid-tier coverage between USD 250,000 and USD 300,000, reflecting a gradual shift toward balancing affordability with adequate medical protection.

“Nearly 82% of Indian outbound travellers still do not opt for travel protection, and in destinations where insurance is not visa-mandated, uptake remains negligible,” Karvat said.

Industry experts believe many travellers still view insurance as a visa requirement rather than an essential financial safety tool.

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Flexible travel planning

Travel behaviour itself is becoming more cautious in 2026. Policybazaar data showed cancellation requests rising 32% this year as travellers increasingly delay bookings closer to departure dates amid uncertainty around global events and rising costs.
With international travel expenses rising by nearly 20–25%, many travellers are shortening trips or shifting toward nearby countries instead of cancelling plans completely.

Manas Kapoor, Business Head, Travel Insurance at Policybazaar.com, said Indian travellers are adapting to global uncertainty rather than reducing travel altogether.

According to Kapoor, insurance is increasingly becoming a core part of travel planning as travellers seek protection against medical inflation, geopolitical disruptions, and evacuation-related risks.

Karvat added that Asego’s travel offerings for the Middle East now include emergency medical support, evacuation assistance, trip interruption cover, and protection for more than 20 adventure sports activities.

He said the broader trend indicates that Indian travellers are gradually moving toward more practical and need-based travel protection as international travel risks continue to evolve.

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