The life insurance corporation of india (LIC) has made a strong start after the government’s decision to scrap GST on individual traditional life insurance policies. According to reports, lic alone saw inflows worth over ₹1,100 crore on the very first day of the reform, signaling a big shift in customer sentiment and investor trust.
Here’s why this move is a game-changer for India’s insurance sector.
📉 1. GST Removal Brings Relief for Policyholders
Until now, buyers of traditional life insurance policies had to pay 4.5% GST on the first premium and 2.25% on subsequent ones. Scrapping GST has immediately reduced policy costs, making insurance more affordable for middle-class families.
🚀 2. Massive Day-One Inflows Show Strong Demand
LIC clocked ₹1,100 crore in inflows in a single day, a number usually spread across weeks. This surge clearly reflects the pent-up demand that customers had been holding back due to extra tax burdens.
🏦 3. Boost for Traditional Life Insurance Plans
The reform primarily benefits endowment, whole-life, and money-back plans, which were earlier seen as costly due to GST add-ons. With taxes gone, these plans are expected to regain popularity among risk-averse indians who prefer guaranteed returns and insurance cover.
📊 4. Positive Ripple Effect on the Insurance Sector
Industry experts believe LIC’s big inflows are just the start. Other private insurers are also witnessing a surge in interest. Overall, the indian life insurance industry is projected to see double-digit growth in policy sales in the coming quarters.
💡 5. A Strategic Push for Financial Inclusion
By removing GST, the government has not only encouraged more people to buy life insurance but also aligned the move with its larger goal of financial inclusion and social security. This ensures wider protection for families across urban and rural India.
🌟 The Bigger Picture
With this change, insurance policies are set to become as accessible as savings bank accounts. LIC’s stellar first-day performance shows that Indians are ready to invest in long-term protection when given a fair price.
✅ Takeaway: LIC’s ₹1,100 crore inflows are not just about big numbers—they signal a turning point for India’s life insurance landscape, where affordability, trust, and security come together for millions of households.
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