Prologue Blog · Sector Insights
Your Insurer Wants Your Step Count
Indian health insurance pays when you fall sick, not to keep you from falling sick. Can a wearable on your wrist change that?
Here is how health insurance works in India. You pay a premium every year. Nothing happens. Then one day you land in hospital, and the insurer pays the bill.
Everything before that day, the doctor visits, blood tests and BP tablets, is mostly on you. Only about 2% of India's outpatient spending is covered by insurance. For a country where crores of people live with diabetes, high blood pressure and heart disease, that is a broken design: patients pay for the care that keeps them healthy, insurers pay for the hospital stays that follow, and premiums keep rising.
Now insurers are paying customers to stay healthy, using data from the watch or ring on their wrist. It sounds like the fix India needs. The question is whether it is.
The problem: India is getting sicker, insurance is getting costlier
| Problem | The number |
|---|---|
| Chronic disease | 10 crore Indians have diabetes, 13.6 crore are prediabetic, and one in three adults has high blood pressure |
| Medical inflation | Costs projected to rise 13% in 2025 and 11.5% in 2026, above the 9.8% global average (Aon) |
| Premium hikes | Niva Bupa, for example, planned an 8 to 9% hike in FY26 |
| Higher prices for the sick | People with diabetes or high BP often pay 25 to 50% more, and can wait up to three years for cover |
| Out of pocket | About 44% of India's health spending comes straight from people's pockets |
Aon says heart disease and high blood pressure are now the biggest drivers of claims in India. These are slow, largely preventable conditions, exactly the part of the journey insurance ignores.
Why insurance can't fix it today
- Built for hospitals. Policies cover hospital stays, not the consultations, tests and medicines that manage chronic disease.
- The insurer barely knows you. It hears from you at renewal and at claim time, with no idea whether your sugar is creeping up in between.
- Little reason to invest in your health. Customers can switch, so money spent keeping you healthy may save a rival money next year.
To break the cycle, insurers need a way to see your health between hospital visits, and a reason for you to stay healthy. That is where wearables come in.
The idea: pay people to stay healthy
IRDAI's 2020 wellness guidelines let insurers reward healthy behaviour with points, renewal discounts, a higher sum insured, and gym or yoga vouchers.
On one popular plan, you earn rewards for walking 10,000 steps a day, sleeping seven to eight hours and logging your meals. The headline promise is up to 100% of your premium back, though one advisor estimates a fit person realistically earns 30 to 50%. At one leading insurer, over 1 lakh policyholders earned rewards in FY25, and Star Health, India's largest standalone health insurer, says it will lean on discounts for healthy behaviour to soften premium hikes.
The gap: the rewards miss the people driving the claims
Who walks 10,000 steps a day and logs every meal? A fit 28-year-old in Bengaluru with a smartwatch. Who drives claims? A 55-year-old with diabetes and high blood pressure, an elderly parent with arthritis, a night-shift worker who barely sleeps. They need help staying healthy the most, and a step target leaves them behind.
They also already pay 25 to 50% more for cover. Discounts that go mainly to the already-healthy can widen that gap, not close it.
The catch: your wrist says more than you think
A wearable tracks your heart rate around the clock, your sleep, your activity, often your location, and on newer devices your skin temperature and blood oxygen. Patterns in that data can hint at an illness coming on, stress, heavy drinking or a pregnancy.
And the company receiving it decides how risky you are. A discount for the active is, in effect, a higher price for everyone else.
India's data protection rules, notified in November 2025, require consent that is free, specific and can be withdrawn, and misuse can draw penalties of up to ₹250 crore. Yet most customers tap "I agree" without reading a word.
Does it actually work?
The case for it
A Discovery and London School of Economics study of over 10 lakh Vitality members in the UK and South Africa found that walking 7,500 steps three times a week was linked to a 27% lower risk of death, and 52% for people over 65. Walking 5,000 steps three times a week for two years could cut healthcare costs by up to 13%. In India, one large insurer says 81% of members in its preventive care programme improved control of sugar, cholesterol or blood pressure in FY25.
The case against it
In one widely cited study, a third of US wearable buyers stopped using their device within six months. People who join step programmes are often already active. The Vitality study is company-backed and not peer-reviewed, and Indian insurers publish very little on whether their programmes actually reduce claims.
What would actually fix it
This is also where the startup opportunity lies.
- Reward outcomes, not steps. Pay people for keeping sugar or blood pressure in range, taking medicines on time or doing a yearly check-up.
- Use devices doctors can trust. Affordable glucose monitors, connected BP machines and ECG wearables built for Indian patients are a big gap.
- Cover the care in between. Bundling teleconsults, tests and medicines into policies would close the 2% outpatient gap.
- Make privacy a selling point. Startups that help insurers handle consent and secure health data will find willing buyers.
- Run the programmes for insurers. Most insurers do not want to build coaching apps and rewards systems themselves.
This post is general information, not medical, financial, legal or tax advice. Insurance, health and regulatory figures are as reported by the sources listed below and change quickly. Check your own policy and position with a qualified professional before you act on it.
Sources
- Business Today: Just 2% of everyday healthcare is insured in India (Praxis and NATHEALTH)
- Aon: India outpaces global average with 2026 medical trend at 11.5%
- Business Standard: Niva Bupa likely to hike health insurance premium by 8 to 9% in FY26
- Business Today: How lifestyle diseases are reshaping India's health insurance landscape
- BloombergQuint: Insurers can offer wellness coupons, reward points to policyholders, IRDAI
- Outlook Money: Young India's new health cover rewards fitness, sleep and smart habits
- SME Street: Health interventions from Aditya Birla Health Insurance
- Business Day: Discovery and LSE study on exercise habits
- PhoneArena: One-third of wearable buyers abandon their device within six months
- King Stubb & Kasiva: DPDP compliance for health insurers and insurtech
- Indian Infrastructure: Government notifies DPDP Rules 2025
- Morung Express: ICMR-INDIAB diabetes and hypertension estimates
Building in healthtech or insurtech?
Founders building at the meeting point of wearables, health data and insurance are raising into a fast-moving market. Investors will want to know which problem you solve, how your product earns trust, how it handles health data under the new privacy rules, and whether customers stay engaged after the first few months.
Prologue works with founders before they raise, on the pitch deck, the financial model and the story investors will test. If you are building in this space and planning a round, talk to us.
About Karan Shah
Karan Shah is a Deal Manager at Earlyseed Ventures, helping back India's next wave of founders across defence, deeptech, SaaS, MedTech and consumer brands. Karan brings about six years in venture capital and deal-making, with a knack for spotting promising startups early and getting deals over the line, from first pitch to final signature.