In a major relief for policyholders and insurance companies, the government has withdrawn GST on life insurance policies. The impact was immediate — Life Insurance Corporation of india (LIC) witnessed a huge surge in investments, receiving over ₹1,100 crore in a single day, nearly double the total inflow of the previous month. Here’s what this means for lic and its customers.
📊 1. What Changed With GST?
Earlier, life insurance premiums attracted 18% GST, making policies costlier for individuals.
With the recent change, GST on life insurance has been reduced to zero.
This makes policies more affordable and attractive to the middle class.
💸 2. Immediate Impact on LIC
On the very first day after GST withdrawal, lic recorded ₹1,100 crore worth of new investments.
This figure is almost twice the total inflows for the entire previous month.
It highlights how tax relief directly encourages people to invest in life insurance.
👨👩👧 3. Benefit for Policyholders
Policyholders will now pay only the premium amount, with no extra GST.
For long-term and high-value policies, this means huge savings over time.
It also makes insurance more accessible for first-time buyers.
🏦 4. Boost for the Insurance Industry
LIC isn’t the only beneficiary — the entire life insurance sector is expected to see a big jump in sales.
Lower costs will attract more customers, especially in tier-2 and tier-3 cities.
Private insurance players may also see a similar surge in demand.
📈 5. Market Sentiment
Investors view this reform as a positive step for the financial sector.
LIC’s stock is likely to benefit from increased sales and improved revenue flow.
Analysts expect double-digit growth in new policy subscriptions in the coming quarters.
🔮 6. What It Means for the Future
More families may now opt for long-term life insurance plans.
The sector could experience a shift towards protection and savings-oriented products.
LIC, being the market leader, is well-positioned to gain the most.
Final Word: The GST withdrawal has given lic a massive ₹1,100 crore boost overnight. For policyholders, it’s a win-win — more affordable premiums and better financial security.
Disclaimer:
The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy or position of any agency, organization, employer, or company. All information provided is for general informational purposes only. While every effort has been made to ensure accuracy, we make no representations or warranties of any kind, express or implied, about the completeness, reliability, or suitability of the information contained herein. Readers are advised to verify facts and seek professional advice where necessary. Any reliance placed on such information is strictly at the reader’s own risk.
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