Life insurers are witnessing a sharp rise in demand for pure protection (term insurance) plans after the government removed Goods and Services Tax (GST) on individual term policies from September 22. Major insurers such as HDFC Life, Axis Max Life, and SBI Life have reported strong momentum in their protection segments, driven by improved affordability and growing consumer awareness.
Affordability Drives First-Time Buyers
The GST exemption has made term insurance significantly more cost-effective, prompting many first-time insurance buyers to opt for pure protection covers. Industry executives expect this upward trend to continue as awareness deepens and premiums become more accessible.
HDFC Life: Over 50% Surge in September
HDFC Life recorded a 50%+ year-on-year growth in retail protection during September alone, reflecting immediate customer response to the GST cut. For the July-September quarter, the insurer's protection business grew 27%, nearly three times the company's overall growth rate.
"Protection has grown at 27%, almost 2.5 times overall company growth," said the executive director of HDFC Life, adding that the GST reduction has already begun showing strong traction.
Axis Max Life Reports 34% Growth
Axis Max Life registered 34% YoY growth in its protection business, supported by Axis Bank and other bancassurance partners.
"The momentum has only improved post the GST change. We have seen strong traction week on week," said the company's MD & CEO.
SBI Life Protection Demand Rises 33%
SBI Life posted a 33% YoY increase in its protection segment on an APE basis. The insurer said the GST relief will further accelerate demand, especially among younger customers.
SBI Life's protection rider attachment ratio now stands at 38%, and its total APE rose 10% YoY to ₹9,920 crore. The company aims to push its protection share beyond 10% of APE.
ICICI Prudential Sees Modest Growth
ICICI Prudential Life, which grew on a high base last year, reported a 2.4% YoY rise in retail protection for Q2 FY26. Retail protection APE increased 10.8%. The insurer expects the GST exemption to enhance affordability and help reduce India's wide protection gap.
India's protection gap stood at 83% in 2019, the highest in the Asia-Pacific region, highlighting the need for deeper insurance penetration.
Industry New Business Premiums Up 12.1% in October
The overall life insurance industry continued its growth momentum in October, with new business premiums rising 12.1% YoY to Rs 34,007 crore.
According to CareEdge Ratings, the surge was driven by strong performance in the individual segment, particularly non-single premium policies.
"The reduction in GST on individual life insurance products and favourable base effect supported the sector's growth," the report said.
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