Mumbai | September 29, 2025 | SKY LINK TIMES
The Life Insurance Corporation of India (LIC) has reported a remarkable surge in investor interest, attracting inflows of over ₹1,100 crore in a single day after the government scrapped Goods and Services Tax (GST) on individual traditional life insurance policies.
This sharp rise highlights the immediate impact of the relief measure, which has made life insurance policies more affordable and appealing to Indian households.
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Removal of GST Sparks Strong Investor Response
According to reports, Life Insurance Corporation of India typically receives about ₹5,000 crore in monthly premium income from retail policyholders. The fact that it garnered over ₹1,100 crore in just one day demonstrates the positive sentiment generated by the GST exemption.
Industry experts believe the move could act as a catalyst for long-term growth in the insurance sector, encouraging more individuals to purchase traditional life insurance policies without the burden of additional tax.
“The removal of GST has significantly improved affordability for individual buyers. We expect a strong increase in policy sales in the coming months,” said an industry analyst.
Financial Performance Remains Strong
Earlier this financial year, The Company reported steady growth in both profit and premium income. For Q1 FY26 (April–June 2025), the insurer posted a consolidated net profit of ₹10,957 crore, up 3.91% compared to the same period in FY25.
The company’s net premium income rose by 4.7% to ₹1,19,618 crore during the quarter. On a standalone basis, It’s net profit increased 5% year-on-year to ₹10,986.51 crore.
The Company continues to dominate the Indian life insurance market, holding over 63% market share in first-year premium income.
Leadership and Strategy
“During the first quarter of this financial year, our overall market share by First Year Premium Income was 63.51 per cent, and we maintained leadership in both Individual and Group Business,” Company’s CEO and MD R Doraiswamy stated in an exchange filing on August 7.
He further highlighted Company’s key strategic priorities, which include expanding the share of non-participating products, improving value of new business (VNB) margins, and strengthening bancassurance distribution channels.
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What This Means for Policyholders
The removal of GST has made traditional life insurance policies more cost-effective, lowering the financial burden on individuals and families. With premiums now more accessible, experts anticipate an uptick in demand, particularly from middle-class households seeking affordable protection plans.
The government’s decision is expected to not only support policyholders but also give a major boost to India’s insurance penetration, which remains lower than many global peers.
Conclusion
Life Insurance Corporation of India’s ₹1,100 crore inflows on Day 1 of removal of GST underline both the trust policyholders place in the insurer and the far-reaching benefits of tax relief in the financial sector. If the trend continues, the move could mark a turning point for life insurance growth in India.
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