GST exemption boosts life insurance sales 21% in Oct-Nov 2025
- IBEF
- January 7, 2026
The private life insurance sector in India grew significantly year-on-year (21%) during October–November due to the introduction of GST exemptions on insurance premiums. As a result of this new tax incentive, there has been increased demand for many types of life insurance products and decreased costs for customers who purchase them. All major private insurance agents have reported increased sales during this time frame due to the growing number of consumers interested in purchasing life insurance following the GST exemption in September 2025.
Analysts’ observations indicate that insurers should expect potential difficulties with profitability due to the loss of Input Tax Credit (ITC), which has historically been used by insurers to mitigate tax costs on purchases. The loss of ITC is likely to create downward pressure on profit margins for new business, particularly for certain companies in the financial year. An example of this is an insurer that is impacted by a material margin loss from ITC despite experiencing relatively low sales growth compared with some other peers. Analysts have indicated that the GST exemption has increased demand; however, managing margin pressures going forward will be a key area of focus for insurers as they adapt to the new tax structure.
Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.
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