GST Relief Ignites Term Insurance Boom! Top Insurers Report Explosive Growth!

Insurance

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Updated on 12 Nov 2025, 07:35 pm

Following the government's decision to remove GST on individual term insurance policies starting September 22, demand for pure protection products has seen a significant increase across India. Life insurance companies such as HDFC Life, SBI Life, and Axis Max Life have reported substantial growth in their protection segments. This GST exemption has made term insurance more affordable, encouraging first-time buyers and is expected to sustain this positive trend in the coming quarters as awareness grows and accessibility improves. HDFC Life noted a retail protection growth of over 50% year-on-year in September, nearly 2.5 times its overall company growth. SBI Life reported a 33% year-on-year expansion in its protection segment, with management expecting further growth. Axis Max Life Insurance saw a 34% year-on-year increase, driven by Axis Bank and other bancassurance partners. ICICI Prudential Life Insurance reported a modest 2.4% growth in its retail protection business for the second quarter, coming off a high base from the previous year. The overall life insurance sector continued its double-digit growth in October, partly aided by this favourable GST change.

Impact This news is highly positive for the Indian stock market, especially for companies in the insurance sector. The increased demand and growth in protection segments are likely to boost the financial performance and stock valuations of listed insurers and related financial entities. Rating: 8/10.

Explanation of Terms: * **Pure Protection Products**: Insurance policies solely providing a death benefit without investment components. * **Individual Term Insurance**: Life insurance coverage for a specific period for an individual, paying a benefit upon death within the term. * **GST Exemption**: Removal of Goods and Services Tax on a specific product or service, making it cheaper for consumers. * **Protection Segments**: The business division of an insurer focusing on life cover policies. * **Affordability**: The ability of consumers to purchase a product due to its price. * **First-time Buyers**: Individuals making their initial purchase of a product. * **Sustain**: To continue at a certain level or rate. * **Retail Protection Growth**: Increase in sales of death benefit-providing policies to individual customers. * **Quarter**: A three-month period. * **Executive Director**: A senior management role responsible for operations. * **Protection Business**: Insurance operations focused on financial protection against risks. * **Bancassurance Partners**: Banks selling insurance products on behalf of insurers. * **Managing Director and CEO**: The top executive responsible for company management. * **Proprietary Verticals**: Business units owned and controlled by the company. * **Momentum**: The tendency for a trend to continue. * **Traction**: Gaining popularity or acceptance. * **Annualised Premium Equivalent Basis (APE)**: A measure of new business value in life insurance. * **Protection Rider Attachment**: Optional add-ons to an insurance policy for extra coverage. * **Total APE**: Total value of new business written annually. * **Protection Share**: Proportion of new premiums from protection policies. * **Modest**: Relatively moderate, not large. * **Coming off a high base**: Growth appearing lower due to comparison with a very high growth period previously. * **Protection Gap**: The difference between needed and actual life insurance coverage. * **Double-digit Growth**: Growth of 10% or more. * **New Business Premiums**: Premiums collected for new policies. * **Single Premium Policies**: Policies paid for with one lump sum. * **Recurring Products**: Policies with periodic premium payments. * **Favourable Base Effect**: Current growth looks strong due to weak performance in the prior period. * **Overall Growth Momentum**: Sustained rate of increase in performance.