Kamlesh Rao, chairman, committee for insurance consciousness (IAC-Life), who informs the media in Kolkata on Wednesday in Kolkata | Photocredit: Debasish Bhaduri
The country’s life insurance sector is looking for equal GST reductions for insurance premiums, reinsurance and committees for protection plans to fully pass on the rate reduction benefit to the policyholders.
The Life Insurance Council has recommended to reduce the GST rate on protection plans to zero with an equal reduction of the tax rates for reinsurance and committees too. A GST rate rate without a subsequent reduction of the tax rate on reinsurance and committee would lead to deviations in the claims of the Input Tax Credit (ITC) for life insurance companies. If insurers lose ITC, this will put pressure on their operational costs.
A reduction in GST on protection plans in the life insurance policy is on the agenda of the GST Council meeting. Currently, time insurance products are attracting a GST rate of 18 percent.
“If an equal GST rate reduction takes place for premium, reinsurance and commission for the security segment, insurance companies could fully pass on the benefits to the customers in terms of premiums. If the reduction of the tax rate is uneven, it would reach the bottom line of the companies,” said Kamlesh Rao, chairman, chairman, chairman,, chairman,, chairman,, chairman,, chairman,, chairman,, on Wednesday,, chairman.
Consciousness campaign
Rao was in Kolkata on the occasion of the new campaign ‘Sabse Pehle Life Insurance’. In the midst of concern about the falling penetration level of life insurance in India, the life insurance sector launched the new ‘real and interesting’ awareness campaign in July aimed at increasing penetration levels by concentrating on three large segments – protection, annuity and savings plans for children.
“In the term insurance, the GST rate can fall. That would certainly make the insurance cheaper for customers. And that is why customers will look at it more positively. All insurance companies want to increase the share of the security segment,” said RAO.
Currently, the share of the security segment is around 7-8 percent for the life insurance sector. “There is a possibility that it would rise to around 10-12 percent in a time frame of a year if the GST speeds take place,” said Rao.
The country’s life insurance sector is expected to grow by 10-15 percent over the next three years. “All legal changes that have been made are consumer-oriented. The other that helps is half of the products in the four product categories protection, participating, non-participating and Ulips insurance companies do not have to submit to Regulator Irdai before being launched under the ‘use and file’ procedure.
Bima Vistaar launch
The long -awaited BIMA Vistaar, the compound coverage of the insurance regulations and Development Authority of India (IRDAI), is expected to be launched by this year.
Bima Vistaar would be the very first compound product that covers death, personal accident, ownership and surgical hospitalization with an affordable premium.
Published on September 3, 2025
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