International travel insurance adoption among Indian travelers witnessed a significant 22% year-on-year increase in 2026, according to data from Policybazaar.com. This rise is attributed to growing concerns over medical emergencies, flight disruptions, geopolitical tensions, and evacuation risks influencing overseas travel decisions. However, industry experts like Dev Karvat, Founder & CEO of Asego, a global travel assistance and insurance company, highlight a substantial protection gap, with approximately 82% of Indian outbound travelers still opting out of travel protection unless it's a mandatory requirement for visa approval.
This dichotomy underscores how global instability is reshaping travel patterns among Indians, pushing some towards more comprehensive coverage and nearby destinations, while a large majority remain vulnerable to unforeseen events abroad.
Shifting Destination Preferences Amidst Global Risks
Policybazaar.com data indicates a clear trend towards short-haul destinations within the Asia-Pacific region, favored over more expensive or geopolitically sensitive long-haul markets. Japan emerged as the fastest-growing destination in 2026, recording a 17% increase in bookings from Indian travelers. Thailand followed with a 12% rise, and Vietnam saw a 7% increase. Singapore and Malaysia maintained stable demand, while Sri Lanka gained traction as a cost-effective international option.
Conversely, outbound travel to the UAE experienced a sharp decline of over 70%, primarily due to regional tensions and safety concerns. Demand for Europe and the United States also softened, impacted by elevated airfares, airspace restrictions, and extended travel routes. This shift demonstrates the increasing influence of geopolitical uncertainty on destination choices, trip durations, and spending habits.
Increased Demand for Robust Coverage
The evolving risk landscape is also influencing how travelers purchase insurance. Policybazaar data shows a doubling in the number of travelers opting for coverage exceeding $250,000, reflecting heightened concerns about overseas medical costs and emergency evacuation expenses. Medical coverage remains the most sought-after feature, chosen by nearly 75% of travelers, followed by trip cancellation cover at approximately 50%, and evacuation cover at around 40%. There's also a rising demand for protections against flight delays, baggage loss, rerouting assistance, and missed connections.
Dev Karvat notes that recent travel disruptions have made these add-on protections increasingly relevant for international travelers. For those heading to Middle Eastern destinations, shorter vacations are preferred, with almost 50% opting for travel insurance coverage of up to two weeks, and the 9–14 day segment accounting for about 27% of policy purchases.
Affordability vs. The Protection Gap
Despite growing awareness of travel risks, affordability remains a critical factor in insurance decisions. Karvat states that nearly 57% of travelers still choose base-level travel insurance coverage of up to USD 75,000. Meanwhile, about 22% opt for mid-tier coverage between USD 250,000 and USD 300,000, indicating a gradual move towards balancing cost with adequate medical protection.
However, the significant protection gap persists, with 82% of Indian outbound travelers still not opting for travel protection where it isn't visa-mandated. Industry experts believe many travelers continue to view insurance merely as a visa formality rather than an essential financial safety net.
Flexible Travel Planning Amidst Uncertainty
Travel behavior itself is becoming more cautious in 2026. Policybazaar data reveals a 32% increase in cancellation requests this year, as travelers increasingly delay bookings closer to departure dates due to global events and rising costs. With international travel expenses climbing by 20–25%, many travelers are shortening trips or redirecting to nearby countries rather than canceling plans entirely.
Manas Kapoor, Business Head, Travel Insurance at Policybazaar.com, observes that Indian travelers are adapting to global uncertainty rather than abandoning travel altogether. He notes that insurance is becoming an integral part of travel planning, as travelers seek protection against medical inflation, geopolitical disruptions, and evacuation risks. Karvat adds that Asego’s Middle East travel offerings now include emergency medical support, evacuation assistance, trip interruption cover, and protection for over 20 adventure sports activities, reflecting a broader trend towards more practical and need-based travel protection as international travel risks evolve.