GST Fails To Entice Life Insurance Buyers, Shows Oct New Sales Data
Public sector behemoth Life Insurance Corporation of India (LIC) grew by 13 per cent in October with a first-year premium of Rs 19274 crore: Reports
MUMBAI: The government’s move to fully exempt life insurance from the 18 percent Goods and Services Tax (GST) rate has failed to accelerate new policy sales, data released for October showed. Life insurance companies collected a first-year premium of Rs 34007 crore for October 2025, a growth of 12 per cent compared to a premium of Rs 30348 crore in October of 2024, a rate at which insurers have been growing for several months. In fact, life insurance industry had grown the first-year premium by 15 per cent in September 2025 to Rs 40207 crore.
Public sector behemoth Life Insurance Corporation of India (LIC) grew by 13 per cent in October with a first-year premium of Rs 19274 crore.
For April-October, life insurance industry grew by 8 per cent to Rs2.37 lakh crore in first year premium while LIC grew by 6 per cent to Rs 140282 crore.
A few insurers even witnessed a drop in new premium for October namely IndiaFirst Life Insurance (-22 per cent to Rs 198 crore), Kotak Mahindra Life Insurance (-11 per cent to Rs 647 crore) and PNB Metlife Insurance (-4 per cent to Rs 513 crore).
A senior life insurance official said, “I think one month is too early to arrive at any definitive conclusion on GST rate cut impact on life insurance.”
Effective September 22, 2025 all individual life and health insurance policies have been fully exempted from Goods and Services Tax (GST) bringing immediate cost relief to policyholders struggling with surging premiums. Prior to September 22 premiums had attracted varying
GST rates. Health insurance, ULIPs, and term life were taxed at 18 per cent, while endowment policies carried 4.5 per cent GST on the first premium and 2.25 per cent on renewal premiums. Single premium annuity policies were taxed at 1.8 per cent.
