Life Insurance Premiums Surge Despite Flat Policy Sales Growth
GST tailwind boosts life insurance premiums, fails to lift policy volumes
Business Standard
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The life insurance sector in India saw a 15.70% year-on-year increase in new business premiums for FY26, despite a mere 4.70% growth in policies sold. This indicates that while premiums are rising, the customer base is not expanding significantly, even after the government removed the 18% GST on individual life and health insurance policies in September 2025.
- 01New business premiums increased by 15.70% year-on-year.
- 02Policies sold only grew by 4.70% year-on-year.
- 03The increase in premiums suggests larger ticket sizes rather than more customers.
- 04The 18% GST on life and health insurance was removed in September 2025.
- 05The growth trend indicates a potential shift in market dynamics.
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In India, the life insurance industry concluded FY26 with a 4.70% year-on-year growth in policies sold, despite a significant 15.70% increase in new business premiums. This discrepancy suggests that while the average premium amount is rising, the overall number of policies sold is not keeping pace, indicating a focus on larger ticket sizes rather than an expansion of the customer base. The government had eliminated the 18% goods and services tax (GST) on individual life and health insurance policies in September 2025, which was expected to stimulate market growth. However, the muted increase in policy sales raises questions about the effectiveness of this policy change in broadening access to life insurance in India.
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The muted growth in policy sales despite rising premiums may indicate challenges in making life insurance more accessible to a wider audience in India.
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