Insurance stocks witnessed a sharp rally on Wednesday after the GST Council announced a major relief for policyholders by removing Goods and Services Tax (GST) on individual life and health insurance.
Shares of Life Insurance Corporation of India (LIC) jumped over 5%, touching an intraday high of ₹914.9. SBI Life Insurance climbed to ₹1,899, while HDFC Life gained to ₹814.9, both registering strong upward momentum. Among other players, Niva Bupa Health Insurance stole the show, soaring more than 10% to ₹91.39.
The GST Council’s decision to exempt individual life and health insurance premiums, along with reinsurance costs, has been welcomed as a game-changer. Until now, different insurance products carried GST levies—
Health Insurance, ULIPs, and Term Life Insurance: 18% GST
Endowment Policies (First Premium): 4.5% GST
Endowment Policies (Regular Premium): 2.25% GST
Single Premium Annuity Policies: 1.8% GST
All these tax burdens have now been scrapped, making insurance products more affordable for consumers and boosting investor sentiment in the sector.
Expert Take
Pranab Uniyal, Head – HDFC Tru (Investment Advisory) at HDFC Securities, called the reforms “bold and transformative,” noting that the move goes beyond insurance. He highlighted that rate cuts across essentials, insurance, automobiles, and home appliances will benefit households at multiple levels and fuel long-term consumption growth.
With this landmark GST reform, analysts believe the insurance sector could see faster penetration in India, alongside stronger growth for leading players like LIC, HDFC Life, and SBI Life.