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LIC Records Rs 1,100 Crore Inflows on Day 1 of GST-Free Life Insurance
Life Insurance Corporation of India (LIC) collected over Rs 1,100 crore in inflows on the first day following the removal of GST on individual life insurance policies, reported The Economic Times.
The GST exemption, effective September 22, 2025, applies to term, unit-linked, and traditional life insurance products, as well as health covers such as family floaters and senior citizen plans. The surge in inflows was largely driven by regular endowment policies rather than new product launches.
Industry executives noted that early September sales had slowed as agents and customers delayed purchases in anticipation of the tax change. Once the GST-free regime was implemented, pent-up demand was quickly released, resulting in a record inflow.
While ticket sizes have increased, the overall number of policies issued has declined. LIC’s new business premiums rose 3% during April-August 2025, whereas private insurers reported a 10% increase. Overall, industry new business premiums climbed to Rs 1,63,461 crore from Rs 1,54,193 crore during the same period last year, despite an 8.9% drop in policy count, according to the Life Insurance Council.
The GST exemption is expected to make life insurance products more affordable and could encourage higher annual premium commitments in the long term. Analysts say it may take a few months to gauge the full impact on sector growth.
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Published: Sep 29, 2025
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