Page 15 - The Insurance Times October 2025

Life insurers seek equal GST cuts for term plans, Attention Subscribers
reinsurance and commissions Please renew your Subscription of The
Life insurers are urging the government to implement uniform GST rate cuts Insurance Times Journal to receive
across premiums, reinsurance, and commissions for term insurance plans. copy of the journal uninterruptedly.
While a GST cut on term premiums is expected, insurers argue that leaving You can now pay by GPAY, Phonepe,
out reinsurance and commission rates would lead to complications in input
tax credit (ITC) and higher operational costs. Paytm, Amazon, ICICI Pay, BHIM UPI
The Life Insurance Council has proposed reducing the GST on protection
products to zero, with matching reductions across related cost elements.
Currently, term insurance plans attract 18% GST.
Kamlesh Rao, Chairperson of the Insurance Awareness Committee, warned
that unequal tax cuts would hinder insurers from passing full benefits to
customers and affect their bottom line.
The industry is hopeful the reform will boost term insurance adoption.
Protection products currently make up only 7-8% of the life insurance market,
but could rise to 10-12% within a year if GST cuts are implemented evenly
across components.

the proposed move to exempt GST on 1.4 crore fewer lives in
health and life insurance premiums for
individuals, calling it a step toward FY25
greater affordability and financial India's leading private life insurers
inclusion. Currently, both health and life reported a collective drop of around 14
insurance premiums attract 18% GST, million (1.4 crore) in the number of
which increases the overall cost of lives covered in FY25, primarily due to
protection for policyholders. a decline in credit-linked group
insurance. Weak loan disbursements in
Jude Gomes, MD & CEO, Ageas
Federal Life, said the move would microfinance and unsecured lending
hit group business volumes.
make insurance more accessible to
millions, aligning with the ICICI Prudential covered 91.74 million
government's vision of "Insurance for lives in FY25, down from 96.91 million Sashi Publications Easy Payment
All" by 2047. The exemption, he added, in FY24. HDFC Life's figure declined to Modes :-
would especially benefit the middle 50 million from 66 million, while SBI Life i) UPI ID: SASHIBOOKS@KOTAK
class and economically weaker held steady at 80.2 million. LIC, ii) GPAY: 9830171022@okbizaxis
sections. however, expanded its coverage to 92 iii) PAYTM: 9830171022@paytm
Experts also highlighted the need to million from 84.8 million. iv) NEFT: Current A/C
review the impact on input tax credit The "number of lives covered" metric
(ITC), which could affect insurers' includes individuals insured under both 402120110000327 of 'SASHI
pricing structures. Narendra retail and group plans, counted once PUBLICATIONS PRIVATE
Bharindwal, President of IBAI, called regardless of how they are insured. LIMITED, Bank of India, VVK
the move pro-customer and a boost for Road Branch., Kolkata, India,
societal welfare. According to industry executives, the IFSC Code : BKID0004021
slowdown in credit business and fewer
Insurers stressed that the reform not group policy enrolments explain the v) Credit Card:
only reduces costs but addresses key decline. The drop comes even as the www.sashipublications.com
structural issues in the sector that have industry attempts to grow protection For any query please call
long impacted margins and reach. offerings and deepen insurance 9073791022/9883398055
penetration through new customer www.sashipublications.com
Top four life insurers cover segments.

The Insurance Times October 2025 15