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19-02-2025

Life Insurance: FDI Boosts Growth Potential | 2025 Update

The Indian life insurance sector is set to grow significantly with the government's decision to raise the Foreign Direct Investment (FDI) limit to 100%. This move will provide the necessary capital for industry expansion, allowing insurers to increase mortality coverage and market penetration. Private insurers have already seen a notable rise in retail sum assured, outpacing new business premiums. The shift to unit-linked investment plans (ULIPs) may pressure margins, but increased capital inflows will help meet the growing demand for coverage.

12-02-2025

Budget 2025 Brings Changes to ULIP Taxation

The Union Budget 2025 has redefined the taxation landscape for Unit Linked Insurance Policies (ULIPs). Starting April 1, 2026, ULIPs with annual premiums exceeding ₹2.5 lakh will be classified as capital assets, subjecting their gains to capital gains tax rather than treating them as income from other sources. This amendment aims to align ULIP taxation with other equity-oriented investments, ensuring a uniform tax treatment across financial products. Policyholders are advised to reassess their investment strategies in light of these changes to optimize their tax liabilities.

02-02-2025

New Tax Rules for Life Insurance Premium

Starting April 1, new income tax rules will impact ULIPs and other life insurance policies with premims over 5 lakh will no longer enjoy tax-free maturity benefits under Section 10(10D). This move aims to align insurance with genuine risk coverage rather than high ticket investments. Smart investors might now explore alternate tax-saving strategies!

12-12-2024

Policyholders Now Get Increased Surrender Value

The new business premium of life insurers was Rs 377,960 crore in the fiscal year ending March 2024. Starting October 1, policyholders will receive higher refunds if they discontinue their policies, as per new IRDAI regulations. This change may lead to increased premiums, impacting insurers' margins. Policies must comply with the new surrender value norms by September 30. Despite initial opposition, the changes aim to improve customer benefits and are expected to positively impact the insurance industry over time.

10-12-2024

Premium Costs for Life Insurance Decrease in November

In November 2024, new business premiums (NBP) of life insurance companies fell by 4.5% year on year (YoY) to Rs 25,306.56 crore, mainly due to a 27.17% drop in LIC's premiums. However, private insurers saw a 30.84% YoY growth in NBP to Rs 13,555.45 crore. Revised surrender value norms, effective October 1, led to enhanced special surrender values for policyholders. Despite the overall decline, private sector growth improved, cushioning the fall. The life insurance industry saw a 15.7% YoY growth in NBP during April–November 2024.

18-11-2024

Govt's FDI Plan: New Insurance Rules

The government plans to allow 100% foreign ownership of insurance businesses, attracting international companies. This proposed legislation also lets individual insurance agents offer policies from multiple companies. The changes are part of the Insurance Amendment Bill, set for introduction in the winter session of Parliament. These measures aim to increase insurance penetration, currently at 4%, by allowing more companies to underwrite policies and enabling agents to sell various covers.

08-11-2024

Record Growth: Life Insurers Boost Premiums 18.56%

The Life Insurance Council reported a 13.16% year-over-year growth in October 2024 New Business Premiums (NBPs), reaching ₹30347.6 Crs, up from ₹26819.01 Crs in October 2023. Year-to-date (YTD) collections also increased by 18.56%, from ₹185195.81 Crs to ₹219561.64 Crs. This growth is attributed to life insurers' focus on first-time buyers. Despite this, new policy issuances dropped by 41.6%. Individual single premiums grew by 8.60%, with overall YTD growth at 14.16%.

01-10-2024

Higher Refunds for Life Insurance Policyholders from October 1, 2024

Starting October 1, 2024, policyholders who surrender their traditional endowment life insurance policies will receive higher refunds due to new rules from India's Insurance Regulatory and Development Authority (Irdai). The exceptional surrender value (SSV) will be increased, providing more flexibility and liquidity. This change benefits those exiting policies early, offering refunds even after the first year. Insurers must now include detailed surrender values in policy illustrations, enhancing transparency for policyholders.

23-07-2024

TDS on Life Insurance Payouts Reduced

Starting October 1, 2024, the tax deducted at source (TDS) on life insurance payouts will be reduced from 5% to 2%. This change, part of the Budget 2024 proposals announced on July 23, aims to increase liquidity for policyholders. The reduction applies to payouts under section 194DA, which covers sums paid under life insurance policies, including bonuses, except for amounts exempt under section 10(10D). Life insurance companies have welcomed this move, anticipating it will benefit customers.

08-07-2024

India’s Life Insurance Sector Sees 14.8% Growth in June 2024

In June 2024, India’s life insurance premiums grew by 14.8% year-on-year, reaching ₹242,434 crore. This increase shows a strong demand for insurance from both individuals and businesses. The Life Insurance Council reported that over 21 lakh new policies were issued, a 12.13% rise from the previous year. Individual and group premiums also saw significant growth. The first quarter of FY25 was particularly successful, with new business premiums up by 22.91% year-on-year, driven by solid performances from significant insurers like LIC.