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    Nil GST a catalyst for life covers as LIC’s Day 1 tally shows

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    By Shilpy Sinha

    Copyright indiatimes

    Nil GST a catalyst for life covers as LIC's Day 1 tally shows

    Life Insurance Corporation of India drew over ₹1,100 crore of inflows on the first day after the goods and services tax (GST) was scrapped on individual traditional life insurance policies, according to people familiar with the matter. This compares with ₹5,000 crore of monthly premium income from retail policyholders in August this year.The bulk of sales came from regular endowment products and not any new offerings.Executives said LIC’s initial September sales had been down from a year earlier as agents and customers held off purchases in anticipation of the tax change applicable since September 22. The pent-up demand was released after the new regime took effect.However, the overall industry trend will be clear only after a few months. The GST Council moved all individual life and health insurance policies to the nil tax category, effective September 22, 2025, under a new two-rate structure. The exemption covers term, unit-linked, and traditional life insurance products, as well as health covers such as family floaters and senior citizen plans.Ticket sizes in insurance have risen over the last few months. By putting insurance under the exempt category, insurers expect lower prices to push some buyers of insurance to increase their annual premium commitments, though this is unlikely in term plans, where coverage depends more on income and protection needs than cost.Live EventsNew business premiums grew 6.2% during April-August from a year earlier, led by rising ticket sizes even as policy growth stayed muted. Private insurers posted a 10% increase, while LIC rose 3%, according to the Life Insurance Council. Overall, new business premiums rose to ₹1,63,461 crore in April-August 2025 from ₹1,54,193 crore a year earlier, even as the number of policies fell 8.9%.Add as a Reliable and Trusted News Source Add Now!
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