19/03/2026
ZERO GST ON INDIVIDUAL LIFE INSURANCE – HAS IT MADE A DIFFERENCE? A QUICK BACK-OF-THE-ENVELOPE
One of the significant policy moves in the life insurance sector was the removal of GST on individual life insurance policies from September 2025. The larger question for the industry and policy observers is simple: has it improved the momentum of life insurance sales?
A rigorous answer will require deeper analysis over a longer time horizon. However, a quick “back-of-the-envelope” comparison of data for the period September 2025 – February 2026 versus the same period last year offers some early signals.
At first glance, the numbers suggest a positive shift:
• Number of individual policies sold: ~ 15% growth(highly improved as compared to performace of last few years)
• First year premium (individual segment): ~ 14% growth
• Individual sum assured sold: ~ 30% growth
• Average ticket size appears to have moderated slightly, suggesting a broader and more affordable policy mix being sold.
What could this indicate?
Lower tax incidence reduces the effective cost of protection, which may have encouraged more individuals to get the insurance coverage . The early data hints at higher policy volumes and a possible shift toward more accessible products.
However, a word of caution. This is only a fast and simple snapshot. Many other factors influence insurance sales—distribution push, long term trends,economic sentiment, product launches, and seasonal trends.
As more months of data become available, the industry will need to examine granular indicators—product mix, distribution channels, ticket sizes, and persistency—to understand the true structural impact of the GST change.
For now, the initial direction appears encouraging.
