Mumbai: Life insurers are seeing an increase in demand for pure protection products following the government's decision to remove goods and services tax (GST) on individual term insurance. HDFC Life, Axis Max Life and SBI Life have reported growth in their protection segments since the exemption took effect on September 22.
GST exemption on individual life insurance policies has made term insurance more affordable and encouraged first-time buyers to opt for pure protection covers. Industry executives expect this trend to sustain in the coming quarters as awareness and affordability improve.
HDFC Life said retail protection growth surged more than 50% year-on-year in September, For the July-September quarter, its protection business increased 27%, nearly three times the company's overall growth.
"While it's early days, on retail protection, growth post GST changes was more than 50% in the month of September. Protection has grown at 27%, which is almost 2.5x that of the overall company growth," said Niraj Shah, executive director, HDFC Life.
Axis Max Life Insurance reported a 34% year-on-year increase in its protection business, led by Axis Bank and other bancassurance partners.
"We have seen a 34% growth as far as pure protection is concerned, and this growth has come across Axis Bank, across banca channels, and across all our proprietary verticals as well," said Sumit Madan, managing director and CEO, Axis Max Life Insurance. "Post the GST change, the momentum has only improved. We have seen strong traction week on week."
SBI Life also saw strong growth in the protection segment, which expanded 33% year-on-year on an annualised premium equivalent basis. The insurer said the GST relief will further boost protection demand.
"We expect that going forward, the growth in the protection segment will be even higher. It also gels with the increasing financial awareness amongst the young population of India," the SBI Life management said.
SBI Life's current protection rider attachment is over 38%, and its total APE stood at ₹9,920 crore, up 10% year-on-year. The company aims to raise its protection share above 10% of APE.
However, ICICI Prudential Life reported a modest 2.4% year-on-year increase in its retail protection business for the second quarter of 2025-26, coming off a high base of 30.7% growth a year earlier. Retail protection APE increased 10.8%. "With the recent changes in the GST regime, the retail product will become more affordable and attractive for customers," the company said, adding that the move will help narrow the country's protection gap.
India's protection gap was 83% as of 2019, the highest among all countries in Asia-Pacific
In October, the life insurance sector continued its double-digit growth for the second month in a row, with new business premiums up 12.1% year on year to ₹34,007 crore.
"The rise was mainly driven by strong performance in the individual segment, particularly non-single premium policies, indicating growing demand for recurring products," said a Care Edge report. "Additionally, a favourable base effect and the recent reduction in GST on individual life insurance products helped sustain the overall growth momentum of insurers."
GST exemption on individual life insurance policies has made term insurance more affordable and encouraged first-time buyers to opt for pure protection covers. Industry executives expect this trend to sustain in the coming quarters as awareness and affordability improve.
HDFC Life said retail protection growth surged more than 50% year-on-year in September, For the July-September quarter, its protection business increased 27%, nearly three times the company's overall growth.
"While it's early days, on retail protection, growth post GST changes was more than 50% in the month of September. Protection has grown at 27%, which is almost 2.5x that of the overall company growth," said Niraj Shah, executive director, HDFC Life.
Axis Max Life Insurance reported a 34% year-on-year increase in its protection business, led by Axis Bank and other bancassurance partners.
"We have seen a 34% growth as far as pure protection is concerned, and this growth has come across Axis Bank, across banca channels, and across all our proprietary verticals as well," said Sumit Madan, managing director and CEO, Axis Max Life Insurance. "Post the GST change, the momentum has only improved. We have seen strong traction week on week."
SBI Life also saw strong growth in the protection segment, which expanded 33% year-on-year on an annualised premium equivalent basis. The insurer said the GST relief will further boost protection demand. "We expect that going forward, the growth in the protection segment will be even higher. It also gels with the increasing financial awareness amongst the young population of India," the SBI Life management said.
SBI Life's current protection rider attachment is over 38%, and its total APE stood at ₹9,920 crore, up 10% year-on-year. The company aims to raise its protection share above 10% of APE.
However, ICICI Prudential Life reported a modest 2.4% year-on-year increase in its retail protection business for the second quarter of 2025-26, coming off a high base of 30.7% growth a year earlier. Retail protection APE increased 10.8%. "With the recent changes in the GST regime, the retail product will become more affordable and attractive for customers," the company said, adding that the move will help narrow the country's protection gap.
India's protection gap was 83% as of 2019, the highest among all countries in Asia-Pacific
In October, the life insurance sector continued its double-digit growth for the second month in a row, with new business premiums up 12.1% year on year to ₹34,007 crore.
"The rise was mainly driven by strong performance in the individual segment, particularly non-single premium policies, indicating growing demand for recurring products," said a Care Edge report. "Additionally, a favourable base effect and the recent reduction in GST on individual life insurance products helped sustain the overall growth momentum of insurers."
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